Seeking Alpha: Structurally Light On Growth, Baxter Has A Lot Of Work Ahead

In healthcare, as in most segments of the market, growth fixes or at least papers over a lot of problems. Nobody really cares if the latest hot tech company is producing lousy margins and has no clear path to meaningful free cash flow - as long as the revenue growth is eye-popping, that's good enough for a high multiple until the day of reckoning comes into view.

For Baxter (NYSE:BAX), the split/spin-off of Baxalta (NYSE:BXLT) leaves behind a company with solid market share in stable markets, but management is going to have to roll up their sleeves and put in some work to find growth opportunities and drive better margins. There is certainly room for Baxter to do better in infusion pumps and renal care, and biosurgery can be a decent business in the coming years, but the market is already expecting a lot of improvements here in the years to come.

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Structurally Light On Growth, Baxter Has A Lot Of Work Ahead

Seeking Alpha: CareFusion's Strong Share Isn't Quite Enough

CareFusion (NYSE:CFN) is an interesting company in several respects. A leader in important markets like drug dispensing, infusion, and respiratory care, the company's margins and returns on capital are nevertheless not really "leader-like". What's more, there are some reasonable concerns as to whether the company's business is skewed too heavily towards capital equipment to facilitate good long-term growth. I come down basically in the middle - I like CareFusion's business well enough, but the weak ROICs and explicit intentions to be active in the M&A market lead me to demand a bigger discount to fair value before buying with my own money.

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CareFusion's Strong Share Isn't Quite Enough

Seeking Alpha: ICU Medical Back At The Drawing Board

After years of under-investment and, in my opinion, complacency regarding its high-quality infusion business, ICU Medical (ICUI) is paying the price. Revenue declined in FY 2013 and likely will decline again in FY 2014. Some of this can be laid on the head of Hospira (HSP), a major customer that has badly mismanaged its infusion/medication management business, but the reality is that ICU Medical has had more than enough time to recognize the issues with Hospira.

Now there's a new sheriff in town, or more accurately a new CEO running the company. Vivek Jain is saying the right things about improving the company's operating performance and increasing its investment in R&D. It also sounds as though management is looking to mobilize that sizable cash hoard. ICU Medical isn't especially well-followed and the company's sluggish near-term growth prospects aren't going to help raise its profile. Even so, I think there's value here and risk-tolerant investors should take a closer look.

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ICU Medical Back At The Drawing Board

The Motley Fool: Is Mylan a Good Buy?

As branded drugs have become more complicated and global growth has become more important to generic franchises, scale matters more than ever. That's a definite check mark in the plus column for Mylan (NASDAQ: MYL  ) , as it is among the largest generic drug makers in the world and one of the few with the scale and capability to operate not only efficiently, but to crack the code on hard-to-manufacture generics.

Wall Street is definitely keen on the shares right now. The stock has risen almost 80% over the last year, and more than 140% over the last two years, as investors have gotten excited about the potential for generic Lidoderm, Copaxone, and Advair, as well as the potential for additional value-creating M&A deals.

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Is Mylan a Good Buy?

The Motley Fool: Even With Growth Opportunities Ahead, Is Hospira Overvalued?

Leading specialty injectables and infusion pump manufacturer Hospira (NYSE: HSP  ) has suffered greatly from largely self-inflicted wounds over the past couple of years. A lackadaisical approach to proper plant management has led to numerous FDA warning letters at key plants and a shipment freeze on the company's pumps. Yet, Hospira remains the largest player in an industry that has attractive gross margins, significant barriers to entry, and frequent supply shortages.

Hospira seems to be on the road back, and seems to be taking seriously both the need to comply with the FDA regulations and the need to augment its long-term growth potential. The problem is that it looks like Wall Street is already many steps down that road in terms of rewarding the company with a robust valuation.

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Even With Growth Opportunities Ahead, Is Hospira Overvalued?

Seeking Alpha: Hikma Has Strong Growth Potential, But High Expectations

Anglo-Jordanian Hikma Pharmaceuticals plc (OTCPK:HKMPY) has had some curious ups and downs over the past two years. The company contemplated selling its injectables business (and got bids) only to decide to keep it, and the company's U.S. oral generics business was hurt by a warning letter in 2012 only to see a shortage of doxycycline in the U.S. lead to significant revenue and profit growth.

Hikma is going to be hard-pressed to maintain that momentum in doxycycline, but this remains a business with some strong growth potential. Not only is Hikma looking to leverage its position as the leading local manufacturer of branded generics for the Middle East and North African markets, but the company has begun to expand into other emerging markets. Although the stock carries an EV/EBITDA multiple that is demanding but not unreasonable, the price looks a little steeper on a discounted cash flow basis. Growth-oriented investors may find something to like here, but I suspect most value-oriented investors will give this one a pass.

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Hikma Has Strong Growth Potential, But High Expectations

The Motley Fool: CareFusion Corporation: A Mid-Cap Med-Tech Leader

A lot of attention has historically been paid to CareFusion Corporation (NYSE: CFN  ) in the context of its place in the infusion pump oligopoly with Baxter (NYSE: BAX  ) and Hospira (NYSE: HSP  ) . There is a lot more to this story, though, as the company is a leader in medication dispensing, pre-op skin prep, and respiratory care. The acquisition of Vital Signs from General Electric will add scale in respiratory care and anesthesia, but leaves the company with enough dry powder to continue making additive deals. CareFusion is not a slam-dunk bargain, and there aren't many of those left in med-tech, but it is a name worth consideration today or at least a spot on investor watchlists.

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CareFusion Corporation: A Mid-Cap Med-Tech Leader

The Motley Fool: Baxter International - The Street Is Too Negative On A Proven Champ

Even though it is a large med-tech company with a market cap over $37 billion, Baxter International (NYSE: BAX  ) just doesn't seem to garner all that much investor interest, or at least not as much as peers/rivals like Biogen Idec (NASDAQ: BIIB  ) , Novo Nordisk (NYSE: NVO  ) , CareFusion (NYSE: CFN  ) , and Hospira (NYSE: HSP  ) . Institutions pay attention, though, and investors may be in a good position to benefit from their skepticism. While the Street is wrapped up in trying to guess just how much business Baxter will lose in its hemophilia and specialty pharmaceuticals businesses to competition, it looks as though the market may be missing the forest for the trees.

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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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Investopedia: Amgen Chased By The Bubble

There are two relatively heated debates that bear directly on Amgen (Nasdaq:AMGN) and its stock. First, is Amgen still really a biotech, or is it really more of a Big Pharma company? Second, is there a biotech/pharma bubble (and if so, how will valuations fare post-popping)? Investors' perspectives on these two issues likely have a lot to do with whether they see value in these shares, for while Amgen is certainly a well-run company looking to become an increasingly balanced advanced drug developer, the valuation is somewhat demanding unless the pipeline really delivers.

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Investopedia: In A Growth-Starved Sector, Becton Dickinson Rules

It's a curious thing that investors' desire for short-term growth will often lead them to pay what looks like much too high a price for a company's long-term stream of cash flows. Although I wouldn't necessarily say that Becton Dickinson's (NYSE:BDX) current price is “much too high”, I do believe the stock is trading above its long-term fair value due to the fact that it's one of the few top-line growth stories in a very growth-challenged healthcare sector.

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Seeking Alpha: CareFusion On The Right Path

This recent melt-up in the market has left relatively few undervalued opportunities in the med-tech sector. While there are still some bargains to be had at the various market cap levels, it's not altogether unfair to say that anything that looks notably cheap today is cheap for a reason. With that in mind, it's not so surprising that CareFusion (CFN) shares don't offer huge upside from today's level. That said, I like the moves that management has made here and if the market (or med-tech sector) were to sell off significantly, this would be a name well worth considering.

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CareFusion On The Right Path

Seeking Alpha: The Street Is Much Too Optimistic About Hospira

It's probably true that a company would be hard-pressed to do worse than Hospira (HSP) has managed in recent years, but it doesn't automatically follow that conditions will get quite a bit better. Hospira certainly could be a better company in a few years' time, but "could" is a dangerous word when it comes to investing. So although I am bullish on Hospira's opportunities in biosimilars, I struggle to come up with a scenario where this stock is priced to outperform.

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The Street Is Much Too Optimistic About Hospira

Seeking Alpha: ICU Medical's Growth Needs Some Intensive Care

ICU Medical (ICUI) is a company likely to toil in near-obscurity for the foreseeable future. The company does most of what it does exceptionally well, but it strikes many as a dull business. While that doesn't seem to be a problem at companies like Bard (BCR) or Becton Dickinson (BDX), ICU Medical is relatively illiquid, under-followed, and still fairly volatile when it comes to earnings performance. All of that said, this is still a company that belongs on the watchlists of value-oriented med-tech investors.

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ICU Medical's Growth Needs Some Intensive Care

Seeking Alpha: Baxter Still Defensive, But Is Now The Time For Offense?

The best thing about Baxter (BAX) is that so much of its business comes from oligopolistic markets with pretty steady demand and reimbursement. The worst thing about Baxter is that so much of its business comes from oligopolistic markets with pretty steady demand and reimbursement.

In theory, Baxter is a good stock to own during slow patches in the med-tech world because the demand for profitable businesses like infusion, recombinants, plasma-derived therapies, and other bioscience products doesn't drop much with the economy, and Baxter reports growth while others contract . On the flip side, the company has historically not looked to target new growth markets, and the company's growth looks pretty pokey when the sector revives.

With a few signs of life here and there in med-tech, as well as oncoming competition in biosciences, it is worth asking whether Baxter is still a name that investors want to hold today.

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Baxter Still Defensive, But Is Now The Time For Offense?

Seeking Alpha: Mylan Looks To Reap A Harvest Of Patent Expirations

In a world where doing a little bit of everything has become popular among drug companies, Mylan (MYL) has stuck to its guns. Unlike Teva (TEVA) and Sandoz (part of Novartis (NVS)), Mylan really is just about generic drugs and the opportunity to leverage one of the largest global franchises in that segment of the drug market. At the bottom line, Mylan is an interesting investment prospect, but really needs to deliver more to be a top choice.

Ending The Year In Line
Mylan did not offer a lot of surprises to close this fiscal year. Revenue rose about 7%, with generics up about 5% overall and the small (less than 10%) specialty business up almost 38%. The generics business was definitely a haves-and-have-not situation this quarter, as the North American business grew almost 13% on good volumes and strong pricing, while the European business saw revenue drop 12% on weak pricing.

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Mylan Looks To Reap A Harvest Of Patent Expirations

Seeking Alpha: CareFusion Deserves Another Chance

By and large, it's hard to feel sorry for, or be patient with, companies where the wounds are largely self-inflicted. Still, when a company has significant market share in multiple markets of size, investors would do well to keep an eye on the story. To that end,
CareFusion (CFN) has disappointed investors recently, but the long-term potential of this company is still quite a bit more than is reflected in the stock today.

Not Many Surprises In The Second Quarter
Given that CareFusion warned about this quarter's results, there weren't a lot of surprises in store when the final results came out. Revenue rose a bit more than 3%, with organic revenue up a little less than 3%. Growth was led by a fine performance in Medical Systems; revenue rose more than 9% on solid growth across dispensing, infusion, and respiratory. Procedural was the problem child - sales fell 2% on an adjusted basis as decent ChloraPrep results (up 5-6%) were offset by weakness in various disposables.

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CareFusion Deserves Another Chance

Investopedia: If CareFusion Can Execute, This Is A Major Bargain

Admittedly, it's not hard to create a basket of too-cheap health care stocks, today, and almost every one of these stories has a sizable "but." In the case of CareFusion (NYSE:CFN), though, slimming down that "but" seems relatively manageable. The company still has a ways to go in improving its returns on capital, but CareFusion's market positioning should make solid returns achievable. However, Wall Street presently gives CareFusion little credit.

A Mixed Start to the Year 

For its first fiscal quarter, CareFusion reported that revenue rose 4%. Growth was led by the "Medical Systems" business at 9%, while the "Procedural Solutions" business saw revenue decline 2%. Dispensing technologies, which is part of Medical Systems, saw 16% reported topline growth. Infusion was surprisingly strong at 7%, while respiratory care and specialty disposables were laggards.

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Seeking Alpha: Exelixis' Curious And Risky Strategy

The FDA was not created to fulfill the role of parent or God, but by and large it is nevertheless a good idea to do as the agency suggests. That makes the decision of small oncology biotech Exelixis (EXEL) to proceed with a clinical trial design that the FDA does not agree with a curious one. While Exelixis may indeed succeed in this approach and bring cabozantinib to the market fairly quickly, it is a risky strategy that bring a lot of volatility to these shares.

No SPA
Clinical trial design and FDA policies are admittedly confusing to the uninitiated, so here is the simple version of what is going on with Exelixis. The company had hoped to get the FDA to sign off on a Special Protocol Assessment (SPA) for its Phase 3 study of cabozantinib in very sick advanced prostate cancer patients, but the FDA has elected not to do so.

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Exelixis' Curious And Risky Strategy

Investopedia: Bizarre Baxter

What exactly is Baxter International (NYSE:BAX) supposed to be? It has a huge business in biological therapies for conditions like hemophilia, but also a sizable business in medical devices and equipment. It's not priced as a value stock, it's dividend is too low for an income stock, but it doesn't really grow enough to be a med-tech growth story. All in all, Baxter is a consummate "neither fish nor fowl" company, but that does not mean that it is not worth a serious look from investors looking for a quality health-care name with growth potential. 

A Challenging Third Quarter  
Analysts seemed positive on Baxter's third quarter results, but it is not immediately clear as to why they should be. Organic revenue growth was just 4% - maybe not terrible in the context of a tough health-care market that has laid low even Johnson & Johnson (NYSE:JNJ) and Abbott Laboratories (NYSE:ABT), but not exactly torrid either.

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