The Motley Fool: A Sleeping Giant About To Awaken

The going has gotten tough in the orthopedic sector, and many of the major players have responded by getting going. Johnson & Johnson (NYSE: JNJ  ) acquired Synthes to become the largest in trauma and the second-largest in spine, while Stryker (NYSE: SYK  ) acquired MAKO Surgical with an eye toward getting ahead of the evolution of the hip and knee markets. Smith & Nephew has diversified into wound care and arthroscopy, while Biomet is reportedly weighing its options, including a possible IPO. That leaves Zimmer Holdings (NYSE: ZMH  ) as the next major player to move.

Zimmer has already done what many of its rivals have found hard to do -- deliver real growth in a tough major joint recon market. Zimmer's knee sales were up 7% in the latest quarter, while hips were up 2%, and recent introductions like the Persona line have helped extend the company's lead in major joint reconstruction, with more than one-quarter market share (Johnson & Johnson is a few points behind, and Stryker is even further back). With a relatively clean balance sheet and some obvious areas to improve, though, Zimmer could have a trick up its sleeve to invigorate growth.

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