Saturday, February 22, 2014

Seeking Alpha: Tornier Working Through An Awkward Transition

Extremities are the highest-growth area in orthopedics today, but Tornier (TRNX) has been on the outside looking in for the last few quarters. Large companies like Johnson & Johnson (JNJ), Biomet, and Stryker (SYK) are paying more attention to these markets as a way of augmenting slower growing hip, knee, and spine markets, but Tornier's problems are largely self-inflicted by way of its sales restructuring.

Tornier doesn't believe it is going to return to torrid growth in 2014, but the market seems to be willing to look past these issues and forward to a strong multiyear extremities market growth story. It also certainly does not hurt that large med-tech companies have started opening their wallets again and Tornier would be an attractive target for multiple companies. Tornier's intrinsic DCF-based valuation isn't so impressive at these levels, but by the EV/revenue method that is often favored in med-tech there still would seem to be worthwhile potential.

Read more here:
Tornier Working Through An Awkward Transition

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