Seeking Alpha: Globus Medical Has The Growth, But What About Value?

On first glance, Globus Medical (GMED) looks like it could be one of the unicorns of the med-tech space - a legit growth story that the market hasn't already pushed up to a red-hot valuation. Globus has what seems to be a sustainable culture built around product innovation, and that steady stream of innovative products could be just the ticket for success in a price-constrained implant world. That said, valuation isn't quite the slam-dunk that value investors may hope to see.

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Globus Medical Has The Growth, But What About Value?

Seeking Alpha: Bad Management Ails Johnson & Johnson; New Drugs May Offer A Boost

This has been rough stretch for one of the bluest of the blue chip stocks – health care giant Johnson & Johnson (JNJ). A generally rotten U.S. healthcare market has certainly hampered results, but management has fired a few rounds into its own feet with extreme product quality issues in the consumer care business (leading to numerous recalls) and unimpressive capital allocation and R&D decisions in the device business. All of that said, though, today's poor performance may be prologue to a better day for patient investors.

Low-Quality Third Quarter
There were only a very few bright spots in this quarter, though reported results did not deviate much from analyst forecasts. Revenue looked alright at 7%, but organic constant currency growth was under 3%, and JNJ has become dependent on foreign markets for its growth (international growth clocked in at over 8% this quarter).


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Bad Management Ails Johnson & Johnson; New Drugs May Offer A Boost

Investopedia: Mergers In Orthopedics Could Heat Up Stocks

Companies in the orthopedics space have had a rough go of it in the last few years. The federal government launched multiple investigations regarding the sales practices of these companies and prosecutors have managed to nail several skins to the wall. At the same time, hospitals and insurers have fought back on pricing and the growth rate for the sector has suffered. Making matters worse, the recession set in and many would-be patients decided to wait to undergo procedures.

Buyouts have added some energy to this space of late. Medtronic (NYSE:MDT) absorbed Osteotech late in 2010; Johnson & Johnson (NYSE:JNJ) announced its intention to acquire Swiss spine and trauma specialist Synthes in April of this year; and just the other day Stryker (NYSE:SYK) announced that it would acquire Orthovita (Nasdaq:VITA) in an all-cash deal. Given the benefits of scale, though, there may yet be more deals to come in this sector. (For background reading, check out Investing In Medical Equipment Companies.)

To read the full piece, click below:
http://stocks.investopedia.com/stock-analysis/2011/Mergers-In-Orthopedics-Could-Heat-Up-Stocks-JNJ-MDT-SYK-SNN-ZMH-NUVA-WMGI0518.aspx

Seeking Alpha: Tough Talk From The FDA Batters BioMimetic

These are difficult times for any company trying to get through the FDA approval process with anything less than 100% perfect data, and BioMimetic Therapeutics (BMTI) is the latest stock to suffer. In response to FDA concerns posted on Tuesday ahead of the company's Thursday panel meeting, BioMimetic's stock is down about one-third on the fear that the company will panel rejection and/or FDA rejection for its new bone-graft substitute.

That said, investors with patience and a healthy appetite for risk might want to consider buying in ahead of the panel recommendation and FDA decision. While BioMimetic's Augment product is not perfect, it does seem to be a safe and efficacious product with a multi-hundred-million dollar market potential.

FDA Playing The Devil's Advocate
In almost all cases, the FDA plays the role of devil's advocate during panel meetings – questioning the safety and efficacy of data and challenging the company at every turn. It is not unusual, then, for the FDA's pre-meeting review to be challenging and adversarial. That said, the FDA was more negative than usual and certainly more negative than most investors expected.

To read the piece, please follow this link: Tough Talk From the FDA Batters BioMimetic

Investopedia: Does Stryker Need Further Reconstruction?

Stryker (NYSE:SYK) has been relatively active of late in recrafting its business, but the first quarter's results suggest that management's work may not be done yet. Stryker remains a good core holding for GARP-oriented investors, but management is going to need to deliver better results on the "guh" side of GARP to get the Street excited again. 

An Okay (but Not Great) Quarter
Stryker did not disappoint, per se. But analysts are not going to be thrilled with the company's numbers nevertheless. Revenue grew more than 12% on a reported basis, with core constant currency organic revenue growth of 4%. That continues a rather unfortunate trend of unimpressive growth that stretches back a few years now.

While that revenue growth met expectations, the composition is the tricky bit. The orthopedics business was flat, while the MedSurg unit was up more than 12%, with double-digit growth in instruments and endoscopy. Even though companies like Johnson & Johnson (NYSE:JNJ) and Covidien (NYSE:COV) have long done well in endoscopy and its a good repeat business, other aspects of MedSurg are more tied to hospital capital budgets - that, and the margins, are largely why analysts don't love that unit so much.

Speaking of profitability, Stryker saw better gross margin on an adjusted basis. Adjusted operating income rose 10%, but margins still contracted all the same. So, the company met its numbers but not in a way that is going to have anybody pounding the table.


Please click the link to read the piece at Investopedia:
http://stocks.investopedia.com/stock-analysis/2011/Does-Stryker-Need-Further-Reconstruction-SYK-JNJ-COV-ZMH-SNN0421.aspx