Lets face it: reimbursement is down, and people are not only electing not to have elective surgeries, they aren't having as many procedures that are not generally considered elective (such as cardiac caths & interventions).
If health care is a human right (as the UN maintains it is) then companies such as this in the future will take a pounding due to government regulation. The US government is even imposing a tariff on medical device companies. While I believe free and open access to the internet will probably improve the world on vast levels, I don't see any point in imposing a tech tax to pay for it.
But this stock has taken a beating, despite that it's a company with a nice record of earnings & income growth, with Decent market position, and a solid product line.
Current price 32.43
Price/Earnings (TTM) . . . . . 10.28x
Price/Sales (TTM) . . . . . . . 2.24x
Price/Book (MRQ) . . . . . . . 2.41x
Price/Cash Flow (TTM) . . . 8.26x
Their cash on hand worries me a bit, they seem to spend close to as much as they bring in. I would prefer them to literally sit around on piles of money, better businesses than theirs have gone under due to lack of liquidity. They make up for it with debt, something I also don't like.
I do kinda think this may in fact be one of those times where sentiment creates a buying opportunity since none of their numbers really look bad, except the stock price which is down something like 20% YTD. It doesn't stop there however, and even though it is a highly competitive market and Medtronic is fairly large in manufacturing and distribution, historically they're stock price blows. While prices for Johnson & Johnson (JNJ), Stryker Corporation (SYK), St. Jude Medical, Inc. (STJ) have all had a sortied past 5 years. Over 10 years it's different: The S&P 500 returned -26.5%, MDT has basically hugged the line at -37.25, JNJ has just narrowly out preformed at +24.6% while SYK is +98.4% and STJ is +229.9%. For perspective during the same period in non-medical fields: Bank of America returned -52.2%, Coke +6.59%, Philips electronics -35.28%, IBM -5.65%, Intel -72.62%, (It's been a rough 10 years). Google has returned 334.48% in share price since 2004. To be fair none of the above includes dividend returns which can be significant, such is the case with coke for example.
Over the last 6 months ~33k shares were acquired (bought/gifted) by insiders while only 11k were sold.
At $30 this company would be trading at 9.5x this year's earnings and 8.78x next year's, and you can expect them to pay you $0.22 per share each quarter which, at 2.7% yield, smacks the shit out of most savings accounts. That being said, the price of that stock willl probably keep getting hammered.
I'm sorely tempted to pick up a pitance of medtronic shares, set a buy at 28.75, 30.00, and 25.50. But I can't do it, unlike some other human rights (Speech, Education, Dignity) it's price isn't marginal to negligible. Healthcare is expensive and will continue to be expensive until part of the process can be mechanized. Until that time, poor people are going to be fucked by their inability to pay for the health care they need and people are generally going to blame the health care companies for this injustice.
This will generally lead to taxation etc, and I just can't stomach that level of risk. If I wasn't negative on the healthcare sector and I was ALREADY exposed to the medical device sub-market and wanted more exposure, I'd probably pick up 5% of my total medical device exposure in MDT if I felt like a bit of a gamble. They might invent the next biggest thing, but they probably won't.
I kinda feel like this is a good ballsy play, but more I feel like 10 years of miss management plus a dismal healthcare outlook should keep you from picking up this stock, despite some very attractive fundamentals.
If health care is a human right (as the UN maintains it is) then companies such as this in the future will take a pounding due to government regulation. The US government is even imposing a tariff on medical device companies. While I believe free and open access to the internet will probably improve the world on vast levels, I don't see any point in imposing a tech tax to pay for it.
But this stock has taken a beating, despite that it's a company with a nice record of earnings & income growth, with Decent market position, and a solid product line.
Current price 32.43
Price/Earnings (TTM) . . . . . 10.28x
Price/Sales (TTM) . . . . . . . 2.24x
Price/Book (MRQ) . . . . . . . 2.41x
Price/Cash Flow (TTM) . . . 8.26x
Davison . . . . . . . 5/5
Alexis . . . . . . . . 5/5
Their cash on hand worries me a bit, they seem to spend close to as much as they bring in. I would prefer them to literally sit around on piles of money, better businesses than theirs have gone under due to lack of liquidity. They make up for it with debt, something I also don't like.
I do kinda think this may in fact be one of those times where sentiment creates a buying opportunity since none of their numbers really look bad, except the stock price which is down something like 20% YTD. It doesn't stop there however, and even though it is a highly competitive market and Medtronic is fairly large in manufacturing and distribution, historically they're stock price blows. While prices for Johnson & Johnson (JNJ), Stryker Corporation (SYK), St. Jude Medical, Inc. (STJ) have all had a sortied past 5 years. Over 10 years it's different: The S&P 500 returned -26.5%, MDT has basically hugged the line at -37.25, JNJ has just narrowly out preformed at +24.6% while SYK is +98.4% and STJ is +229.9%. For perspective during the same period in non-medical fields: Bank of America returned -52.2%, Coke +6.59%, Philips electronics -35.28%, IBM -5.65%, Intel -72.62%, (It's been a rough 10 years). Google has returned 334.48% in share price since 2004. To be fair none of the above includes dividend returns which can be significant, such is the case with coke for example.
Over the last 6 months ~33k shares were acquired (bought/gifted) by insiders while only 11k were sold.
At $30 this company would be trading at 9.5x this year's earnings and 8.78x next year's, and you can expect them to pay you $0.22 per share each quarter which, at 2.7% yield, smacks the shit out of most savings accounts. That being said, the price of that stock willl probably keep getting hammered.
I'm sorely tempted to pick up a pitance of medtronic shares, set a buy at 28.75, 30.00, and 25.50. But I can't do it, unlike some other human rights (Speech, Education, Dignity) it's price isn't marginal to negligible. Healthcare is expensive and will continue to be expensive until part of the process can be mechanized. Until that time, poor people are going to be fucked by their inability to pay for the health care they need and people are generally going to blame the health care companies for this injustice.
This will generally lead to taxation etc, and I just can't stomach that level of risk. If I wasn't negative on the healthcare sector and I was ALREADY exposed to the medical device sub-market and wanted more exposure, I'd probably pick up 5% of my total medical device exposure in MDT if I felt like a bit of a gamble. They might invent the next biggest thing, but they probably won't.
I kinda feel like this is a good ballsy play, but more I feel like 10 years of miss management plus a dismal healthcare outlook should keep you from picking up this stock, despite some very attractive fundamentals.
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