Kieran Gallahue, director of Edwards Lifesciences (EW, Financial), purchased 3,000 shares of the company for $90.10 per share on Feb. 3 according to a Form 4 filingwith the Securities and Exchange Commission. He now owns 9,042 shares of the company.
Edwards Lifesciences has a market cap of $19.61 billion, a price-earnings (P/E) ratio of 34.54, an enterprise value of $20.41 billion and a price-book (P/B) ratio of 7.41.
Edwards Lifesciences got started when Miles “Lowell” Edwards had the idea at the age of 60 to mechanize the human heart. Edwards had an engineering background in hydraulics and fuel pump operations. He presented the concept to Dr. Albert Starr, a young surgeon at the University of Oregon Medical School, who thought the idea was too complex. Instead, Starr encouraged Edwards to focus first on developing an artificial heart valve, for which there was an immediate need.
After two years the first Starr-Edwards mitral valve was designed, developed, tested and successfully placed in a patient. People around the world were astonished by the surgery's success. The company Edwards Laboratories formed shortly after its success was later purchased by American Hospital Supply Corp. and became American Edwards Laboratories.
In 1985 the company was sold to Baxter International Inc. (BAX, Financial); in 2000 the company was spun off as an independent publicly held corporation and began trading on the New York Stock Exchange.
The company has increased its revenue by an estimated 11.1% over the previous 10 years and its gross profit by an estimated 12.5% over the previous decade.
During the fourth quarter, Edwards Lifesciences' sales of its transcatheter heart valves, which are implanted with catheter tubes inserted through the arteries, grew 29% to $432 million led by continued strong therapy adoption across all geographies with notable strength in the U.S. and Japan according to an article in the Wall Street Journal on Feb. 1.
According to GuruFocus, Edwards Lifesciences has a 7 out of 10 financial strength rating with a cash-debt ratio of 1.55 and an equity-asset ratio of 0.58. The Beneish M-score of -2.03 indicates the company is a manipulator of its financial statements.
Edwards Lifesciences Corp has a 8 out of 10 profitability and growth rating with an operating margin of 27.61%, a net margin of 19.22%, a return on equity (ROE) of 22.63%, three-year revenue growth of 14.80% and three-year EBITDA growth of 13.60%.
Edwards Lifesciences has five good signs, according to GuruFocus:
- The company’s revenue per share growth rate has shown consistent growth averaging 13.80% per year over the previous five years.
- The company’s operating margin is in expansion, which is usually a good sign.
- The company’s P/B ratio is 7.39, which is close to its one-year low of 6.8
- The company’s price-sales (P/S) ratio is 6.65, which is close to its one-year low of 6.8.
- The company is trading close to its one-year low in price
Disclosure: Author does not own any shares of this company
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