Medtronic Worth The Wait

While technology and industrial companies enjoy a resurgence in growth and high commodity prices draw investors to the materials sector, the health care sector is something of a no-man's land these days. As Medtronic's (NYSE:MDT) latest earnings report highlights, there is a decided lack of growth in the sector and that has led many investors to cash out and chase faster prey. Although there is nothing to suggest a quick turnaround is on the way, patient value investors may nevertheless want to nibble on some of the leaders in expectation of an eventual turnaround. 

Another Mediocre Quarter
Perhaps the most positive thing that can be said about Medtronic's fiscal second quarter is that it likely will not disappoint anybody to any significant degree. Revenue (net of currency) was weak, climbing just 2%, but that is all that many analysts had in their models. Though the quarter was stagnant on the whole, there were pockets of strength. Diabetes and the company's defibrillator business (Physio-Control) both saw double-digit revenue growth, and surgical technologies and cardiovascular were both up in the high single digits. The company's two largest businesses, though, were both weak as cardiac rhythm management and spine were both down about 1%. (For more, see A Checklist For Successful Medical Technology Investment.)
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