Science and health care leader PerkinElmer (PKI) isn’t just feeling fit after its spree of recent acquisitions. As industry peers Iqvia (IQV), Charles River Laboratories (CRL), PRA Health Sciences (PRAH) and Avantor (AVTR) make new highs, PKI stock is also researching a potential new breakout.
The medical products powerhouse has just announced it is buying in vitro diagnostics firm Immunodiagnostic Systems. Also this month, PerkinElmer said it will expand its leadership position in cell biology by acquiring Nexcelom Bioscience. These new deals come just five months after PerkinElmer added Horizon Discovery, a leader in gene editing and modulation, to its lineup.
In total, the three deals come with an estimated price tag of $752 million. Horizon Discovery accounts for around half the total, with that acquisition valued at $368 million.
PerkinElmer On Trial As Clinical Research Organizations Soar
Operating in 190 companies with around 14,000 employees, PerkinElmer deliver unique solutions to serve the diagnostics, life sciences, food, environmental and industrial markets. In 2020, the Massachusetts-based maker of imaging readers, spectrometers, and optical and temperature sensors generated approximately $3.8 billion in sales.
In Q1, PerkinElmer posted 455% year-over-year earnings growth contributing to its average EPS growth of 248% over the last three quarters. Sales in the first quarter popped 100%.
For Q2, analysts expect PerkinElmer to deliver 54% growth but only a 15% increase for 2021.
PKI stock earns a 92 Composite Rating. Iqvia, Charles River Laboratories, PRA Health Sciences and Avantor lead the group, which ranks No. 74 among the 197 groups IBD tracks.
Boosted by pandemic-driven demand for Covid-19 vaccines and other medical research services, these top-rated clinical research organizations (CROs) have been soaring to new highs. IQV stock broke out in April and has continued to climb. It just rose above a four-weeks-tight pattern.
CRL stock has shown similar action, and PRAH stock has also been trading near its all-time highs.
Diagnosing The Relative Strength Line For PKI Stock
In sync with the strong recent performance of CRL, PRAH and IQV, the relative strength lines for these CRO stocks have been trending higher. However, the RS line for AVTR stock has moved more laterally.
PKI stock has the weakest RS line among the industry group leaders. The line, which compares a stock’s price performance to that of the S&P 500, slumped sharply as PerkinElmer retreated from its highs in January to build a new chart pattern.
But the relative strength of PKI stock has begun to show signs of a rebound. The stock is now building the right side of an early stage base, showing a 162.80 buy point.
Look for the RS line to continue to recover as PerkinElmer tries to rejuvenate its performance along with Iqvia, Charles River Labs, PRA Health Sciences and Avantor.
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Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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