What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Surgical Equipment & Consumables - Specialty company Teleflex (NYSE: TFX) jumped 5.3%. Is now the time to buy Teleflex? Access our full analysis report here, it’s free for active Edge members.
• Surgical Equipment & Consumables - Diversified company Solventum (NYSE: SOLV) jumped 4.4%. Is now the time to buy Solventum? Access our full analysis report here, it’s free for active Edge members.
• Medical Devices & Supplies - Specialty company Haemonetics (NYSE: HAE) jumped 5.4%. Is now the time to buy Haemonetics? Access our full analysis report here, it’s free for active Edge members.
• Health Insurance Providers company Centene (NYSE: CNC) jumped 4.4%. Is now the time to buy Centene? Access our full analysis report here, it’s free for active Edge members.
• Health Insurance Providers company Molina Healthcare (NYSE: MOH) jumped 4.4%. Is now the time to buy Molina Healthcare? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Haemonetics (HAE)

Haemonetics’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 15 days ago when the stock gained 22.1% on the news that the company reported third-quarter results that surpassed analyst expectations and raised its full-year financial guidance. 

The medical technology firm posted adjusted earnings of $1.27 per share on revenue of $327.3 million, with both figures comfortably beating Wall Street's forecasts. While total revenue declined 5.3% year-on-year, the company's organic revenue fell only 1.8%, which was significantly better than the 5.3% decline analysts had anticipated, signaling resilience in its core operations. Furthermore, Haemonetics demonstrated strong profitability and cash generation. Its operating margin expanded to 17.9% from 15% in the same quarter last year, and free cash flow was a robust $106.3 million. Bolstered by the strong performance, management lifted its full-year adjusted earnings per share guidance to a midpoint of $4.90.

Haemonetics is flat since the beginning of the year, and at $78.79 per share, it is trading 11% below its 52-week high of $88.53 from November 2024. Investors who bought $1,000 worth of Haemonetics’s shares 5 years ago would now be looking at an investment worth $669.76.

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