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Bull Of The Day: Owens and Minor (OMI)

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Owens & Minor (OMI - Free Report) is a Zacks Rank #1 (Strong Buy) with A’s for Value and for Growth. This is an interesting name because I watched it last week as it had several days with strong buying support.  There were two days during which this stock was up 7% last week.  Let's take a look at why this stock hold the top Zacks Rank in this Bull of the Day.

Description

Owens & Minor, Inc. is a global healthcare solutions company dedicated to Connecting the World of Medical Products to the Point of CareSM by providing vital supply chain services to healthcare providers and manufacturers of healthcare products. Owens & Minor provides logistics services across the spectrum of medical products from disposable medical supplies to devices and implants. With logistics platforms strategically located in the United States and Europe, Owens & Minor serves markets where three quarters of global healthcare spending occurs. Owens & Minor's customers span the healthcare market from independent hospitals to large integrated healthcare networks, as well as group purchasing organizations, healthcare products manufacturers, the federal government, and healthcare patients at home through the Byram Healthcare subsidiary.

Earnings History

We have seen better when it comes to the earnings history. This stock has beaten the Zacks Consensus only one time in the last four outings. The company missed the mark twice and met it one time. The important thing to consider here is that the most recent quarter was the beat and it was a solid one coming in 42% ahead of expectations.

Earnings Estimate Revisions

I see a one penny move higher for the current quarter and a three cent move higher for the next quarter.

The Zacks Rank cares more about the full year numbers and for this year that estimate has moved from $0.60 to $0.65 in the last 90 days.

The 2020 Zacks Consensus Estimate has moved from $0.70 to $0.77 over the last 60 days and that is the sort of move that gets your attention. A 10% jump in estimates is going to have an impact on the stock.

Valuation

The valuation is good here, so it deserves the "A" in the Zacks Style Scores. The forward PE of 11x is very low, as is the price to book of less than 1 at 0.92x. That suggests the stock is trading at a value of less than all the assets and value players love that. The topline growth is thin at 1% in the most recent quarter and margins are pretty thin, but there is a buyer and this stock is on the move.

I believe we see double digits on this one in the near future.

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