Ever since deciding to focus exclusively on medical devices, Teleflex (TFX)
has done quite well for itself and for its shareholders, with the stock
price making a hockey stick formation since 2011. Gross margins have
improved more than six points, operating margins have improved similarly
(on an adjusted basis), and the company generates attractive recurring
free cash flows. What’s more, management has shown on multiple occasions
that it can identify, close, and integrate value-creating acquisitions.
Teleflex
has a lot going for it right now, including growth opportunities tied
to the ramp-up of existing products (particularly UroLift) and new
pipeline opportunities. The issue is valuation; the market is valuing
Teleflex as a company with double-digit revenue growth, which it will be
in 2018, but as that growth rate decelerates, I am concerned about
whether there will be enough drivers (or strong enough drivers) to
maintain the valuation.
Read more here:
High Expectations Could Be Teleflex's Most Serious Challenge
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