How Have IHI’s Mid-Capitalization Stocks Performed?



Performance of IHI’s mid-capitalization holdings

On June 9, 2016, the top performer within the mid-capitalization space of the iShares U.S. Medical Devices ETF (IHI) was Idexx Laboratories (IDXX), which rose by 1.5%. The stock rose on the news of its launch of a new Rapid Visual Pregnancy Test for cattle.

The stock closed at $90.25 on June 9. It was trading above its 20-day moving average price. The stock has risen by 23.8% on a year-to-date basis.

IHI’s mid-capitalization underperformers include Bruker (BRKR), Globus Medical (GMED), and Nevro (NVRO). Nevro’s stock fell on profit-booking on June 9. The stock had risen on June 8 on news of its pricing of a $150 million public offer of convertible senior notes.

In a press release, Nevro announced “the pricing of its public offering of $150 million aggregate principal amount of 1.75% convertible senior notes due 2021 registered under the Securities Act of 1933, as amended.”

The release also said, “Nevro granted the underwriters a 30-day option to purchase up to an additional $22.5 million aggregate principal amount of such notes to cover over-allotments, if any.”

In another press release, Nevro announced that “its management will be presenting at the JMP Securities Life Sciences Conference on Tuesday, June 21, 2016, in New York City.”

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Nevro closed at $75.72 on June 9 and was trading above its 20-day moving average. The stock has risen by 12.2% on a year-to-date basis. Nevro has a relative strength index of 73, indicating that the stock has moved temporarily into an overbought situation. However, 26.7% of its total outstanding shares are in short positions.

Nevro has a book value of $8.08 per share. At its current price, the stock is trading at a price-to-book value of ~9.40x. Nevro has a weight of ~0.4% in IHI’s portfolio.

Analysts’ estimates and recommendations

Analysts estimate Nevro’s 12-month target price to be $79.80. Six analysts recommend “buys” on the stock, one analyst recommends a “hold” on the stock, and no analysts recommend “sells” the stock.


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