Wednesday, July 16, 2014

The Motley Fool: St. Jude Medical, Inc. Still Feeling the Love

I thought St. Jude Medical (NYSE: STJ  ) was already getting a fair bit of the benefit of the doubt back in April, but Wall Street has continued to bid these shares up on growing hopes that new products from the pipeline will drive revenue growth back into the mid-single digits or higher. Up almost 10% over the last three months, St. Jude has modestly outperformed Medtronic (NYSE: MDT  ) , significantly outperformed Boston Scientific (NYSE: BSX  ) , and done rather well against Johnson & Johnson and the market as a whole. 

My basic outlook on St. Jude really hasn't changed much. I think many in the market overestimate the likelihood that the company will lose significant share in quadripolar systems and underestimate the potential for products like Portico (a transcatheter heart valve) and CardioMEMS (an implantable monitoring device for heart failure) to contribute meaningfully to results. All of that said, the market appears to be baking in low-to-mid teens annual cash flow growth over the next decade and that seems like a sufficiently bullish outlook.

Read more here:
St. Jude Medical, Inc. Still Feeling the Love

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