Mylan, Inc. (MYL)
 
In Q1, MYL has posted gains in 8 of the past 10 years, generating a 7.76% average return and a 6.72% median return. MYL's standard deviation is 15.36% in the period and its correlation to the SPY is 0.02. 
 

The value of branded drugs losing patent protection in 2013 dropped by $25 billion to roughly $30 billion from 2012.  That resulted in Mylan's new products sales totaling just $108 million in the third quarter, down from $299 million a year ago.  However, the patent cliff re-accelerates this year and next year, climbing to $34 billion in 2014 and jumping to $66 billion in 2015, suggesting significant opportunities for growth from new launches.   One particularly strong area for Mylan this past year has been Epipen auto injectors, which helped Mylan's specialty drug sales climb 18.6% to $805.7 million over the first 9 months of 2013.  Mylan has an opportunity to grow its injectibles business following its $1.75 billion buyout of Agila Specialties, the India based unit of Strides Arcolab.   Mylan is guiding for the launch of 800 injectible products, including 150 in the U.S., over the next five years. Including ANDAs associated with Agila deal, Mylan has a total of 287 ANDAs pending FDA approval, 41 of which are potential first-to-file's representing $24 billion in annual brand sales, according to IMS Health.  Mylan also has opportunities for growth tied to boosting production with Gilead on HIV-drugs, leveraging its deal with Pfizer to produce branded drugs in Japan, and launching biosimilars such as Roche's blockbuster Herceptin in India.  Overall, Mylan is guiding for 12% top and 19% bottom line growth in 2014.  So far this month, Mylan has launched a generic version of Novo's Prandin for type 2 diabetes, a generic version of Novartis immune suppressant Myfortic, and a generic form of Pfizer's Detrol.  Prandin's sales totaled $213 million in the 12 months ending September.  Sales of Myfortic totaled $239 million in the U.S. and $579 million globally in 2012.  And sales of Detrol totaled $571 million for the 12 months ending September.  Mylan's adjusted EPS have climbed a compounded 34% a year since 2008. Revenue has grown a compounded 10% in the period.  Thanks to better-than-hoped specialty drug sales and a high-profile launch of generic Copaxone -- Teva's $4 billion a year MS treatment -- set for May, analysts have upped their forecast for Mylan's earnings to $3.39 per share in 2014 from $3.34 over the past 120 days.   Mylan's long term projection is for 13% compounded annual revenue growth through 2018, resulting in $6 per share in earnings.   The company also announced a $500 million buyback authorization exiting Q3.

 
Q3 Earnings Transcript
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Sun Hydraulics Corp. (SNHY)
 
In Q1, SNHY posted gains in 8 of the past 10 years, generating a 20.7% average return and a 15.54% median return. SNHY's standard deviation is 28.38% in the period and its correlation to the SPY is 0.07.
 

The broad hydraulics industry grows roughly in line with GDP while sales of SNHY's screw in hydraulic cartridges used to control pressure or fluids has grown about four times GDP over time.  That growth is thanks to increasing replacement of older valves with cartridge valves.  The company's products are used in construction, agricultural, mining, and fire and rescue and other utility equipment, as well as in automation machinery, presses, and plastics machinery.  56% of sales come from international markets.  About two thirds of product sales are used in mobile applications.  The remaining third is sold into industrial markets.  SNHY also sells into alternative energy markets.  Sales have increased from $80 million in 2000 to $205 million in 2013.  Q4 sales grew 13% to $49 million thanks to international demand, including an 18% lift in sales in China, bringing full year 2013 sales to $205 million, slightly higher than the $204 million full year guidance issued in Q3.   The 18% YoY increase in China marked acceleration from the 10.8% growth for the first nine months of the year.  In Q3, the Americas, Europe and Asia Pacific accounted for $24.9 million, $14.8 million, and $9.6 million in Q3 sales, respectively.  1.1% sales growth in the third quarter came despite the index of hydraulic products falling 2% in the quarter versus a year ago.   Europe improved, with sales rising 5% year-over-year.  Growth in Asia (China and Korea in particular) and Europe more than offset the 5% drop in North America.  Historically, U.S. PMI has led SNHY's order activity by 6-10 months.  In September, the PMI was 56.2, up from 51.6 a year ago.  PMI improved to 56.4 in October, 57.3 in November, and finished at 57 in December -- up from 50.2 the year before. The company opened a third factory in Sarasota last year to boost capacity.  Operating margin was 26.5% in Q3.  The company has $46.4 million in cash on its balance sheet exiting Q3, up from $34.5 the prior year, and is debt free. There 12 days to cover held short. Earnings estimates for 2014 have increased to $1.65 from $1.60 over the past 90 days.

 Company's Q3 EPS transcript