Groundhog Day At Wright Medical, As The Lower Extremity Business Disappoints

“History doesn’t repeat itself, but it often rhymes,” Mark Twain (disputed)

Wright Medical’s (WMGI) problems with its lower extremity business in the second quarter of 2019 aren’t the same as the company’s prior issues in that business, but the Street doesn’t care. The fact remains that while Wright Medical still offers comparatively attractive growth rates and operating leverage within the med-tech space, the company has shown itself to be unreliable and unpredictable, whatever the reason(s) may be, and investors hate paying premiums for unreliable performance.

This is probably the time you want to consider these shares, but it takes a patient contrarian viewpoint to do so. Wright Medical is still on its way toward gaining the top spot in shoulders, and despite the issues in the lower extremity business, the company still has a strong portfolio of next-gen technologies and products. Add in the prospects for meaningful inflection in profits over the next three to five years, and this is an interesting name to consider on this pullback even with the threat of increased competition from companies like Stryker (SYK) and Zimmer Biomet (ZBH).

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Groundhog Day At Wright Medical, As The Lower Extremity Business Disappoints