Steris Corp. (NYSE:STE) — This small-cap medical equipment and supply company manufactures and sells infection prevention, contamination control and surgical support products for the health care industry worldwide.
The company recently beat analysts’ fiscal Q3 earnings expectations, reporting $0.58 versus an estimates $0.56. This follows a two-year string of successful earnings and revenue increases. Net income increased by 42.9% versus the same quarter last year, rising from $33.65 million to $48.1 million.
As pointed out by The Slant Editor Jeff Reeves, in 5 Stocks That Could Be Buyout Targets, Steris may be “exactly the kind of company that health care giants could be gunning for.” Reeves emphasized the stability of its earnings history with a double-digit five-year growth rate
Technically, STE broke from a two-year quadruple-top consolidation following spikes of accumulation that appear to be the result of block buying. Even though the stock is slightly overbought, having jumped from $37 to over $40 in the past month, aggressive investors could take full positions based on the company’s record of success.
Although no one can absolutely predict a buyout of any stock, Steris’ fundamental and technical characteristics are solid enough to drive the price of its stock much higher. Or, as Reeves put it, “Steris: Attractive, buyout or not.” Its short-term trading target is $45.