The Motley Fool: Good News at Boston Scientific: What's Next

Flashy moves aren't always the best moves in med-tech. Medtronic (NYSE: MDT  ) shelled out big bucks for Aterial Vascular Engineering, CoreValve, and Ardian, and the first two led to significant patent infringement issues and the third may never lead to a marketable product (renal denervation). I don't want to pick on Medtronic alone, as Hologic, Johnson & Johnson, and Boston Scientific (NYSE: BSX  ) have all made some big deals that went south and squandered shareholder capital.

With that in mind, I like the recent updates from Boston Scientific. Between two clinical trial updates and a small acquisition, Boston Scientific is laying the groundwork for what should be some good incremental revenue and profit growth in the coming years. I don't believe these items are enough to vault the company's stock to the level of great buy, but they are positive developments nevertheless.

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Good News at Boston Scientific: What's Next

The Motley Fool: Why I'm Still Bullish on Medtronic

t seems like there's a cottage industry on the sell-side in "What's wrong with Medtronic (NYSE: MDT  ) ?" pieces, but the stock has actually done OK since I last wrote on the company in late February. With Covidien pretty much flat in that time and Boston Scientific (NYSE: BSX  ) and St. Jude Medical (NYSE: STJ  ) both down, drug-fueled Johnson & Johnson is one of the few peers to really exceed the company's performance (while Bard has basically kept pace). 
 
I continue to believe that Medtronic is undervalued as a low-growth/high-quality med-tech supergiant. The company has unquestionably seen multiple significant setbacks over the last year or so, but the company still has lucrative franchises in CRM, spine, neuromodulation, and diabetes that throw off plenty of cash and allow the company to buy its way into future growth markets.

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Why I'm Still Bullish on Medtronic

The Motley Fool: Edwards Lifesciences Corp Scores A Potentially Major Legal Ruling Against Medtronic

If a court ruling made late on Friday holds up, the battle for market share in the U.S. between Edwards Lifesciences'  (NYSE: EW  ) Sapien family of transcatheter heart valves and Medtronic's (NYSE: MDT  ) CoreValve may be over before it begins. In a rare move for the med-tech industry, a judge granted a motion for a preliminary injunction against sales of the CoreValve that would effectively put Medtronic on ice until at least 2016. Medtronic is going to fight this decision, but it definitely seems likely to reignite optimism for Edwards' position in this market.

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Edwards Lifesciences Corp Scores A Potentially Major Legal Ruling Against Medtronic

The Motley Fool: Multiple Setbacks May Spell Opportunity at Medtronic, Inc.

In a pretty richly valued med-tech space, it takes some setbacks to uncover value and opportunity. Medtronic (NYSE: MDT  ) has certainly seen setbacks, as the company has abandoned renal denervation, has lost some momentum in CRM, and may not be as competitive as hoped in drug-coated balloons. On a more positive note, transcatheter heart valves look like a viable growth driver and Medtronic has several opportunities in areas like neuromodulation, diabetes, and atrial fibrillation.

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Multiple Setbacks May Spell Opportunity at Medtronic, Inc.

Seeking Alpha: Echo Therapeutics Facing Major Execution Risks In A Very Competitive Market

I go back a long way with the diabetes space, and glucose monitoring in particular, as that was a big part of my coverage group back in the sell-side research days. During that time, there was the occasional MiniMed (acquired by Medtronic (MDT)) or TheraSense (acquired by Abbott Labs (ABT)), but quite a few Integs for every one of those successes. Today, Echo Therapeutics (ECTE) is grinding along, hoping that its Symphony tCGM System vaults it into the winner's circle with existing glucose monitoring companies like Medtronic, Abbott, and DexCom (DXCM) and not into the scrap heap of failed testing companies.

I have very mixed feelings about this stock. The company has handled its financing needs with about as little finesse as possible, but the company has swapped out the CEO who oversaw those funding rounds. The company's device seems accurate enough to garner FDA approval, but the FDA has a habit of moving the bullseye on companies in this space, and I don't really have a good answer for how Echo will compete against the entrenched players and position the Symphony as the go-to system. All of that suggests to me that this is a binary outcome with a very uncertain future.

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Echo Therapeutics Facing Major Execution Risks In A Very Competitive Market

The Motley Fool: Edwards Lifesciences Corp. Still Trying To Regain Footing

Transcatheter valves still make up one of the relatively few therapeutic areas in med-tech that is both large and growing at a significant rate. That does not mean that it's all downhill for Edwards Lifesciences (NYSE: EW  ) , however, as the company continues to struggle to meet expectations in the U.S. and hold off Medtronic (NYSE: MDT  ) in the marketplace. Good market positions in tissue valves and critical care will help some, but the twin challenges of competing with Medtronic and overcoming disappointment with the company's growth are likely to still weigh on the stock.

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Edwards Lifesciences Corp. Still Trying To Regain Footing

The Motley Fool: Wall Street Fully On Board With Boston Scientific

For as many execution issues as Boston Scientific  (NYSE: BSX  ) has had over the years, current management deserves credit for the extent to which they have changed both the reality of the business and Wall Street's perception of it. The company is still behind large rivals in key growth areas like transcathether heart valves and renal denervation, but it is no longer a notable laggard in terms of reported growth.

The only real downside that I see to the story is that expectations have moved to a point where it seems like the Street is giving the company a lot of benefit of the doubt with respect to its execution in 2014. The next 12 months should see meaningful progress across multiple product lines, but it's hard to argue that the shares are notably undervalued after the big move over the past year.

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http://www.fool.com/investing/general/2013/10/28/wall-street-fully-on-board-with-boston-scientific.aspx

The Motley Fool: The Expectations Hangover Still Hurting Edwards Lifesciences

It really wasn't that long ago when rampant enthusiasm for minimally invasive heart valves sent the shares of Edwards Lifesciences rocketing from around $22 to almost $110 per share in about four and a half years. While the stock was in the $90s, I dutifully played my role of Cassandra -- pointing out that analysts and investors were getting carried away with their expectations for the adoption of transcatheter heart valves and underestimating the risks of competition from companies like Medtronic (NYSE: MDT  ) .

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http://www.fool.com/investing/general/2013/09/30/the-expectations-hangover-still-hurting-edwards-li.aspx

Investopedia: Medtronic Marking Time

These aren't the glory days for med-tech giant Medtronic (NYSE:MDT), as fiscal 2014 will be a pretty weak year from a growth perspective ahead of some significant new product launches in 2015. Even with a high-quality name like Medtronic, that lack of growth can lead to shares languishing as investors are attracted to (or distracted by) more impressive-looking stories in the short term. Although I'm not a passionate bull on Medtronic shares by any stretch, the stock is pretty much what passes for a bargain these days in the larger segment of this industry and I think it's a respectable core holding.

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Investopedia: Where Do The Bears Go Next With St. Jude Medical?

In a sell-side world where Underperform/Sell ratings are pretty rare, is a bit of exception, as several analysts have either recommended that investors sell St. Jude Medical (NYSE:STJ) or have issued what I'd call “neutral … but we really mean sell” calls. Many of these analysts believe that St. Jude is going to see serious share loss in cardiac rhythm management (pacemakers and ICDs) due to safety problems with the leads, but that just hasn't happened. But with CRM revenue holding up, they're increasingly turning to worrying about earnings quality and long-term growth potential.

Although I think St. Jude shares have gotten a little expensive, I think the bears are going to have to work harder to make their case. Simply put, while St. Jude isn't even close to the most dynamic name in med-tech, it's doing better than the bears want to acknowledge. So although I expect another round of attempts to talk down the numbers/performance, I still see more opportunities for the company to do better in the coming years.

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Seeking Alpha: AngioDynamics Stronger Than It Looks, But Not So Cheap

When AngioDynamics (ANGO) reported last night, it brought a challenging fiscal year to close for this small med-tech company. A combination of weak job growth, higher co-pays/deductibles and uncertainties ahead of the full implementation of the Affordable Care Act have impacted procedure counts, while the company tried to digest a sizable acquisition and restructure its sales approach. All told, the company's performance has looked pretty soft, with rivals likely gaining share in many markets.

Going over the numbers and listening to management's call, though, suggests that the business may have already started to turn the corner. This is still a "show me" story in that regard, and management needs to show that it can regain momentum in the face of larger rivals like Covidien (COV), Edwards (EW) and Bard (BCR). Investors have already started coming back around to this story, as the shares are up almost 30% from their late April lows, and I'm not sure the company can grow fast enough to make today's price a bargain.

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AngioDynamics Stronger Than It Looks, But Not So Cheap

MassDevice: CareFusion May Be Weighing Two Very Different Deals

At the risk of sounding a bit mean, CareFusion (NYSE:CFN) doesn't get all that much attention in the market. The company has a solid business between its operations in pharmaceutical dispensing, infusion, respiratory care, and procedural disposables, but it never really seems to get much attention unless/until there's another round of news about infusion pumps – a business where rivals like Baxter (NYSE:BAX) and Hospira (NYSE:HSP) have seen recalls that benefited CareFusion.

That has changed very recently, though, as CareFusion seems to be a key potential acquirer for at least two medical device businesses known to be on the block – ICU Medical (NSDQ:ICUI) and Smiths Group's (LON:SMIN) Smith Medical. CareFusion has long been an active acquirer and recently not only reaffirmed its commitment to future deals, but a willingness to do larger deals than before. While both ICU Medical and Smiths Medical make solid sense for CareFusion, both deals have certain drawbacks as well.

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http://www.massdevice.com/blogs/massdevice/carefusion-may-be-weighing-2-very-different-deals

MassDevice: The Bulls May Have Run A Little Too Far With St. Jude Medical

Combine a bull market with increasing optimism that major med-tech markets are stabilizing, and it's not so hard to see why stocks like St. Jude Medical (NYSE:STJ) have seen solid runs and enjoy pretty favorable valuations today. In the case of St. Jude, while I have generally been on the side arguing that the Street was not giving the company enough credit for its long-term prospects, the move into the mid-$40s for the stock argues that the Street has in fact come up to speed.

With that in mind, St. Jude is going to need to start outperforming to drive a significantly higher multiple and share price.

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http://www.massdevice.com/blogs/massdevice/bulls-may-have-run-little-too-far-with-st-jude-medical

MassDevice: Not A Lot Of Bargains Among Med-Tech Stocks

Medical technology stocks of all stripes have been enjoying a pretty exceptional run in the market, as healthcare has actually been 1 of the leading sectors in the recent rally. Unfortunately for investors, however, revenue, profits, and free cash flow have not been improving at the same rate, and the number of real bargains in the market has shrunk noticeably. While there are still a few opportunities that look undervalued, investors are increasingly finding themselves faced with a limited menu of attractive options.

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http://www.massdevice.com/blogs/massdevice/not-lot-bargains-among-medtech-stocks

MassDevice: Edwards Lifesciences Comes Back Down To Earth ... Hard

Although I had been writing for some time that I thought Edwards Lifesciences (NYSE: EW) was significantly overvalued by the market, I don't take any particular pleasure in seeing the stock down almost one-quarter over the past year and year-to-date in 2013. Even so, it's a valuable reminder as to the risks of getting a little too bullish about first movers in fast-growing markets and the danger of the idea that “valuation doesn't matter”.

While the valuation has indeed come down significantly for Edwards, so too have the growth expectations. I do believe the market for transcatheter heart valves will exceed $4 billion in 2020 and that Edwards will remain the market leader. With free cash flow likely to grow at a low-teens rate and the stock slightly below fair value, these shares look interesting for more risk-tolerant investors.

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http://www.massdevice.com/blogs/massdevice/edwards-lifesciences-comes-back-down-earth-hard

Investopedia: Broad Weakness Makes It Harder To Like St. Jude Today

I've been relatively optimistic about St. Jude Medical's (NYSE:STJ) long-term prospects as the company navigates its current multi-year lull in growth. The company has a legitimate presence in important markets like cardiac rhythm management, atrial fibrillation, neurostimulation, and heart valve replacement, plus a pipeline that could reignite growth. With all of that said, it's still getting harder to ignore the realities of just how growth-challenged the company is in the here and now. Although I do believe the long-term expectations for St. Jude are increasingly beatable, this could be a frustrating stock to own for a little while yet.

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http://www.investopedia.com/stock-analysis/041813/broad-weakness-makes-it-harder-st-jude-today-stj-bsx-mdt-ew-jnj-atrc.aspx

MassDevice: Looking Back On A Pretty Sedate ACC

Sometimes the major annual medical meetings are jam-packed with significant and market-moving data. And then sometimes they're like this year's American College of Cardiology conference, with relatively limited useful data from an investing perspective.

While there was some incremental data relating to significant emerging growth markets like transcatheter valve replacement and renal denervation, the most significant data concerns one of the more uncertain market opportunities – left atrial appendage occlusion/closure.

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http://www.massdevice.com/blogs/massdevice/looking-back-pretty-sedate-acc?page=show

Seeking Alpha: Growth Needs Resuscitation, But Medtronic Still Looks Like A Value

The biggest obstacle for med-tech giant Medtronic (MDT) today is not its competition nor the still-sleepy markets for medical procedures. Instead, the biggest problem Medtronic has is a market/investor base that seems unwilling to accept the company for what it is. Medtronic came in shy of the more robust growth expectations this quarter, but even modest long-term growth projections suggest these shares are undervalued today.

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Growth Needs Resuscitation, But Medtronic Still Looks Like A Value

Seeking Alpha: TAVR Is Real (And Maybe Spectacular), But Edwards Lifesciences Isn't A Bargain

Once again I seem to have underestimated how Wall Street's love of a good story can overpower and outweigh the likely long-term economic returns from that story. In the case of Edwards Lifesciences (EW), I have never doubted that transcatheter aortic valve replacement (TAVR) (also called "... valve implantation" or TAVI) was going to be successful, nor that Edwards' Sapien would be a major player.

What I doubted was whether Wall Street would keep pumping up the valuation it was willing to pay. With Edwards being one of the relatively few double-digit organic growth stories in med-tech, the stock is up about 30% since my last skeptical piece - not all that much better than other med-tech names like Medtronic (MDT) or Boston Scientific (BSX) in what has been a strong med-tech market, but 30% is 30%. Even still, while I have no problem forecasting double-digit free cash flow growth for Edwards, I still don't see a compelling valuation here.

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TAVR Is Real (And Maybe Spectacular), But Edwards Lifesciences Isn't A Bargain

Seeking Alpha: St. Jude's Rally Has Taken Away The Easy Money

It was relatively easy to like St. Jude Medical (STJ) in the low-to-mid $30s, but a sustained rally since late November has taken away a lot of this company's relative discount. Now St. Jude faces many of the same problems as most other large med-tech companies - stressed and slow-growing major markets and potentially abundant competition in emerging higher-growth markets. Although these shares are not especially expensive, investors should temper their expectations at these prices.

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St. Jude's Rally Has Taken Away The Easy Money