Thursday, July 18, 2013

Investopedia: Where Do The Bears Go Next With St. Jude Medical?

In a sell-side world where Underperform/Sell ratings are pretty rare, is a bit of exception, as several analysts have either recommended that investors sell St. Jude Medical (NYSE:STJ) or have issued what I'd call “neutral … but we really mean sell” calls. Many of these analysts believe that St. Jude is going to see serious share loss in cardiac rhythm management (pacemakers and ICDs) due to safety problems with the leads, but that just hasn't happened. But with CRM revenue holding up, they're increasingly turning to worrying about earnings quality and long-term growth potential.

Although I think St. Jude shares have gotten a little expensive, I think the bears are going to have to work harder to make their case. Simply put, while St. Jude isn't even close to the most dynamic name in med-tech, it's doing better than the bears want to acknowledge. So although I expect another round of attempts to talk down the numbers/performance, I still see more opportunities for the company to do better in the coming years.

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