Hanger Orthopedic Group - Value

Hanger Orthopedic Group (HGR) continues to growth at a consistent rate and recently reported a 19% increase in earnings.

Company Description

Hanger Orthopedic develops, acquires and operates orthotic and prosthetic patient-care centers. The centers make, fit and supervise the use of external musculoskeletal support devices and artificial limbs.

The company also manufactures devices and is the country's largest distributor of orthotics and prosthetics components.

Income Up 19%

Hanger reported quarterly results on Jul 27 that included sales of almost 4206 million, a 6% improvement since the same period last year. Earnings per share rose more than 19% to 37 cents, beating the Zacks Consensus Estimate by 2 cents.

The period marked the fourth earnings surprise in the past 5 quarters.

Hanger guided in line with the current estimates, expecting full-year EPS to be $1.28, give or take a penny.

Valuations

Analysts have not had a chance to revise their estimates yet, but that will likely improve the already attractive valuations. The forward P/E is coming in around 13 times. The price to book is 1.8, better than the industry average of 2.1 and well under the average for the S&P.

The current growth rates are expected to be 14% both this year and next year, but again that should improve. But those rates are priced at a slight discount with a PEG ratio of 0.9 times.

Consistent Growth

Below is a chart of the consensus estimate for the past 5 years, with each colored line being a year. The gradual and consistent increases are indicative of solid management and a stable company moving forward.

Read the Mar 30, 2010 article.

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