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

Seeking Alpha: Athenahealth Can't Maintain Its Sky-High Valuation

The market is full of misunderstood companies, as well as perhaps three times that number of companies where management believes Wall Street just doesn't understand the business or the proper value for it. With health IT provider athenahealth (ATHN) being one of the relatively rare companies where a majority of analysts are not positive on the stock and where the current price is above the average price target, it seems like there's some disconnect in this name.

While the top-line growth at athenahealth is indeed impressive, and the growth runway would seem to be long and wide indeed, this is not a stock where investors can afford to be complacent. The stock's valuation already assumes that the company emerges as a major player in healthcare IT, but investors may want to ask whether the company's progress with enterprise-scale customers and sales leverage merits such a lofty expectation.

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Athenahealth Can't Maintain Its Sky-High Valuation

Cardinal Puts Some Cash To Work

Large piles of cash seem to tempt people into making bad decisions. At the corporate level, large cash balances often attract so-called "activist investors" looking for quick paydays or to embolden management into ill-timed buybacks or illogical acquisitions. That does not seem to be a problem with Cardinal Health (NYSE:CAH), though, as this large medical distributor has used almost $2 billion of its cash on hand to make a pair of acquisitions that seem to make a lot of sense. 

Kinray and Independent Pharmacies
Almost two weeks ago, Cardinal announced the acquisition of privately-held Kinray Inc for $1.3 billion in cash. A pharmaceutical distributor focused mostly on New York City and the Northeast U.S., Kinray will enhance Cardinal's exposure to independent pharmacies. While major chain pharmacies like Walgreen (NYSE:WAG) and CVS Caremark (NYSE: CVS) are a huge part of Cardinal's revenue base, the company makes a lot more money (on a margin basis) serving smaller customers, so expanding that customer base should be pretty accretive for Cardinal.

Buying Further into China ...
On Monday, Cardinal announced its latest deal - paying $470 million in cash (and assuming $60 million in debt) to acquire Zuellig Pharma China. Part of Zuellig Pharma (which in turn is part of the even larger Zuellig Group), Zuelling Pharma China is one of the largest distributors of pharmaceuticals and medical devices and supplies in China. Serving over 123,000 independent pharmacies and 49,000 provider locations, this Zuellig buy certainly enhances Cardinal's scale in what is almost sure to be a major market for medical distribution for some time to come. (For more, see Top Factors That Drive Investment In China.)

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