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Earnings Play on Steris Corporation

|Includes: Steris Corporation (STE)

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With an approaching earnings announcement on May 6, Steris (STE) is a good play for a large pre-earnings runup in price. Steris manufactures the bread-and-butter sterilized tools, materials, and treatment items used routinely in hospitals. As such, it makes medical items which are not, to a hospital, optional purchases. The company is a good choice in a financial environment in which expenses are being cut, but beyond that, the company has the habit of being an earnings surpriser. Note the steadily rising price in the past two weeks, on gently increasing volume.

For those using options, the May $25 call STEEE last traded at $1.20 and would be a good choice.

Zacks gave the company an endorsement a few days ago:

Steris Corporation (NYSE: STE - News) has produced impressive surprises on earnings, topping analysts' EPS estimates by an average of 40% over the past 4 consecutive quarters. For the fiscal year ending March 2009, Wall Street is projecting EPS growth of 26% on a year-over-year basis.

See article here.