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Weekly Large-Cap Results: Boston Scientific Rose on 1Q16 Earnings



Reviewing large-caps

The large-cap stocks of biotechnology (or biotech) ETFs remained negative, with the exception of the large-caps from the iShares US Medical Devices ETF (IHI), which rose by 1.5%. IHI outperformed the SPDR S&P 500 ETF (SPY), which fell by 1.3%.

The large-cap stocks of the iShares Nasdaq Biotechnology ETF (IBB) were the worst affected, with a total return of -6.4%. This was followed by the large-caps stocks of the SPDR S&P Biotech ETF (XBI), which returned -5.7%. The large-cap stocks of the Health Care Select Sector SPDR ETF (XLV) returned -2.4% for the week ended April 29, 2016.

The above graph reflects the performances of different biotech ETFs for the week ended April 29, 2016.

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Boston Scientific rose on 1Q16 results

Among the large-cap biotech stocks, the biggest news for the week ended April 29, 2016, came from Abbott Laboratories (ABT). ABT announced its acquisition of St. Jude Medical (STJ) for $25 billion. However, Boston Scientific (BSX) also rose 10.3% in the week on good 1Q16 results.

As per its press release on April 27, 2016, Boston Scientific’s sales stood at $2.0 billion in 1Q16. The company had issued guidance for the quarter in the range of $1.89 billion–$1.94 billion. BSX’s revenue represented a rise of 11% on a year-over-year reported basis. BSX’s adjusted earnings per share (or EPS) stood at $0.28 in 1Q16 compared to $0.21 in 1Q15.

Boston Scientific closed at $21.92 and was trading above its 20-day moving average on April 29. Year-to-date, the stock has risen by 18.9%. At its current price, the stock is trading at a 2016 forward price-to-earnings (or PE) multiple of ~20.2x.

The book value of Boston Scientific is at $4.77 per share. At its current price, the stock is trading at a price-to-book value of ~4.6x. Boston Scientific has a weight of 0.9% in XLV and 4.6% in IHI.


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