Seeking Alpha: Wright Medical Stumbling Toward Better Days

The share price performance of Wright Medical Group (NASDAQ:WMGI) has continued to languish in the wake of the company's announced intention to merge with Tornier (NASDAQ:TRNX). For what consolation it may bring investors, Wright Medical hasn't been alone here in 2015, as the stocks of other orthopedic players like Stryker (NYSE:SYK), Zimmer (NYSE:ZMH), and Exactech (NASDAQ:EXAC) haven't done particularly well either.

Short-term stock market performance isn't a particularly compelling way to view a stock, but there are other issues that investors need to consider here. While Wright Medical managed to avoid its fourth straight quarterly revenue miss, the company has seen the approval of its Tornier merger delayed by antitrust concerns and the approval of its Augment biologic product delayed by problems with a vendor. Wright Medical remains undervalued on the basis of what it could become in a few years' time, but investors who tend toward the less patient should probably look elsewhere for healthcare investment ideas.

Click the link for more:
Wright Medical Stumbling Toward Better Days

Seeking Alpha: With The Tornier Deal On Track, Wright Medical Will Be Busy

Investors haven't been all that enthusiastic about Wright Medical (NASDAQ:WMGI) since its late October announcement of a merger with Tornier (NASDAQ:TRNX) and an approval letter from the FDA for its Augment biological product. The shares have fallen almost 20% since then, as I would imagine some investors who had held Wright Medical in anticipation of a favorable Augment outcome and/or a bid from a larger med-tech company might have decided to call it a day.

To be sure, Wright Medical's management is putting a lot on its plate. Integrating the two businesses is going to take quite a bit of energy and launching Augment will demand a high level of sales execution - it has all the hallmarks of a great product, but it won't sell itself. If Wright Medical can successfully meld the two businesses, deliver on the multi-hundred million dollar promise of Augment, and drive greater leverage in manufacturing, sales, and distribution, a fair value above $40 is possible. If management stumbles, or if the extremities market slows, the market will not be forgiving.

Please continue here:
With The Tornier Deal On Track, Wright Medical Will Be Busy

Seeking Alpha: Did Wright Medical Make The Right Move?

Four months ago, I fretted that Stryker's (NYSE:SYK) acquisition of SBi reduced the pool of eligible buyers to acquire Wright Medical Group (NASDAQ:WMGI) and/or Tornier (NASDAQ:TRNX). A lot of bullishness on these companies was based on their attractiveness as M&A targets for larger ortho companies, but the two companies have instead decided to come together to create a leading enterprise in the fast-growing extremities segment.

I have mixed feelings on this move as a Wright Medical Group shareholder. Wright Medical's somewhat disappointing third quarter sales result suggests that there's still more self-improvement to be done and Tornier has been working through sales restructuring efforts of its own. That said, Wright Medical CEO Bob Palmisano is a proven leader in the med-tech space and the prospects of a company with leading technology in both upper and lower extremities is appealing, not to mention the fact that the impending approval of Augment brings hundreds of millions of potential revenue into play.

Read more here:
Did Wright Medical Make The Right Move?

Seeking Alpha: Wright Medical, Wrong Market

This isn't a particularly healthy environment for smaller med-techs, and Wright Medical Group (NASDAQ:WMGI) is paying the price for that sector weakness. There wasn't anything particularly wrong with Wright Medical's second quarter report, and the company continues to perform exceptionally well in the fast-growing extremities market, but there was nothing new to push analysts or investors to a more positive outlook. With market share growth potential in lower extremities, an upcoming FDA decision on Augment, and the balance sheet flexibility to do deals, there are still good reasons to hold Wright Medical, but the discount to fair value doesn't scream "must buy" right now.

Please continue here:
Wright Medical, Wrong Market

Seeking Alpha: Wright Medical And Tornier See A Desirable Partner Choose Another

It may be a little extreme to diagnose the med-tech market with buyout fever, but it's definitely a frequent talking point - particularly in the case of orthopedic extremity companies Wright Medical Group (WMGI) and Tornier (TRNX). While it may be wise advise not to own stocks just for their takeout potential, the reality is that there is a widespread expectation that major orthopedics players will look to these companies as a way of adding some extra growth (extremities markets are growing at double-digits, and likely to continue to do so for several years) and rounding out their product offerings.

A funny thing happened on the way to buyout bliss, though. Stryker (SYK), a particularly acquisitive company in the med-tech space and an ortho player with a glaring lack of extremity exposure, went and bought somebody else - announcing on Monday that it had reached an agreement to acquire privately-held Small Bone Innovations (or SBi). Stryker's move doesn't end the party for Wright Medical or Tornier, but it does cut the list of potential buyers.

Read the full article here:
Wright Medical And Tornier See A Desirable Partner Choose Another

Seeking Alpha: A Step In The Right Direction For Tornier

I've never been particularly fond of orthopedic extremity specialist Tornier (TRNX), but even I wouldn't have expected the wild ride these shares have been on over the past year. Management's decision to shift its sales/distribution strategy has introduced a lot of noise into quarterly earnings and I believe the shares have also gotten caught up in the sell-off in riskier healthcare names. Tornier's business is still pretty messy, but the company has a very good shoulder franchise and extremities could be the next area of consolidation in the device space.

Follow this link for more:
A Step In The Right Direction For Tornier

Seeking Alpha: Wright Medical Continuing To Gain Share In A Growth Market

While Wright Medical (WMGI) has gotten caught up in the same sell-off that has hit many other small-cap, med-tech stocks, the underlying performance of the business continues to improve. Wright Medical is outgrowing the lower extremities market, and still has balance sheet flexibility to add products or distribution in areas like extremity devices/tools and biologics. Even with the decline in the share price, this is not a cheap name, but it does offer above-average scarcity value in an increasingly acquisitive med-tech market.

Follow this link for more:
Wright Medical Continuing To Gain Share In A Growth Market

Seeking Alpha: Wright Medical Has The Right Stuff, But Isn't Cheap

Extremities remain a popular growth market within orthopedics and med-tech, and that has kept Wright Medical Group (WMGI) a pretty popular stock. With mostly solid fourth quarter results and guidance, and growing expectations for more M&A in the space, I don't think Wall Street is in a hurry to jump off this name just yet. The valuation doesn't really look a huge bargain, though, so investors buying into Wright Medical should realize that any interruptions in growth could bring swift and severe punishment for the market.

Follow the link to read more:
Wright Medical Has The Right Stuff, But Isn't Cheap

Seeking Alpha: Tornier Working Through An Awkward Transition

Extremities are the highest-growth area in orthopedics today, but Tornier (TRNX) has been on the outside looking in for the last few quarters. Large companies like Johnson & Johnson (JNJ), Biomet, and Stryker (SYK) are paying more attention to these markets as a way of augmenting slower growing hip, knee, and spine markets, but Tornier's problems are largely self-inflicted by way of its sales restructuring.

Tornier doesn't believe it is going to return to torrid growth in 2014, but the market seems to be willing to look past these issues and forward to a strong multiyear extremities market growth story. It also certainly does not hurt that large med-tech companies have started opening their wallets again and Tornier would be an attractive target for multiple companies. Tornier's intrinsic DCF-based valuation isn't so impressive at these levels, but by the EV/revenue method that is often favored in med-tech there still would seem to be worthwhile potential.

Read more here:
Tornier Working Through An Awkward Transition

Seeking Alpha: Amidst A Mess, Wright Medical's Extremity Business Is Strong

Orthopedic extremities specialist Wright Medical Group (WMGI) is going through one of those stretches where everything looks like a mess. The company is still navigating through the Augment FDA rejection, while also selling its major joint reconstruction business and trying to improve the sales and efficiency of the extremities operation.

For all of the noise, though, this is a company with growing share in a fast-growing niche of the orthopedics market and one with ongoing improvements in profitability as well. These shares may not pop out immediately as being particularly undervalued, but between the growth, profit improvement, and M&A possibilities, I continue to believe that Wright Medical shares can head higher from here.

Continue reading here:
Amidst A Mess, Wright Medical's Extremity Business Is Strong

Seeking Alpha: FDA Kicks Wright Medical In The Groin - What Now?

There are days when the news that comes out of the stock market makes you want to rip the router out of the wall and just forget about stocks for a couple of days. Thursday, August 8th was one of those days as the FDA delivered a sharp kick to the collective groins of Wright Medical (WMGI) shareholders with a nearly impossible-to-justify rejection of the company's application for the Augment orthobiologic product.

If there was any good news, and that's a big "if", it was that most analysts were not fully incorporating Augment into their numbers for Wright Medical. Consequently, the rejection is not devastating from a numbers perspective. Moreover, it's still at least theoretically possible that the company can find a way to get this product on the market eventually, where it could still be a multi-hundred million dollar product. For now, though, investors would do well to think about Augment on par with getting included in the will of a wealthy uncle you didn't even know you had - the FDA has made it clear that that Augment will reach the U.S. market more or less over its dead body.

Please follow the link to continue:
FDA Kicks Wright Medical In The Groin - What Now?

Seeking Alpha: Tornier's In The Right Market, But Expectations Are High

It seems pretty clear that extremities are the next big growth opportunity in orthopedics. Of course, "big" is a relative statement - the market for implants and tools to repair shoulders, elbows, ankles, and feet is only about 10% the size of the market for spine care, and only about 25% of the size of the spinal fusion market. Even so, double-digit market growth tends to attract attention, and that could be a good thing for Tornier (TRNX) - an extremities-focused small cap with strong share in this emerging market.

Right now, Tornier is still a company in transition. Not only did the company see a rather sudden CEO/CFO change a year ago, but Tornier is also still in the midst of a sales force transition, the integration of a large acquisition, and the introduction of a significant new product. And while I do believe Tornier is likely to start posting better results, I do wonder if the Street isn't a little too enamored of the company's market share and the double-digit growth of the extremities market.

Go to Seeking Alpha for the full article:
Tornier's In The Right Market, But Expectations Are High

Seeking Alpha: Wright Medical Showing A Growth Core, But Transition Will Be Messy

Sometimes simplifying a business makes things a little more complicated in the short term. When Wright Medical (WMGI) elected to sell its hip and knee implant business to MicroPort for $290 million, the company put itself on path toward becoming a pure extremity and biologics med-tech company, a decision that improve growth and margins down the road. At the same time, though, the transaction removes a cash cow business and forces the company to rebuild its international infrastructure.

On balance, I believe the MicroPort transaction will lead to better shareholder value over the long term as it frees management to maximize the far more promising extremity and biologics opportunities. Likewise, it gives the company more flexibility in M&A and makes the company a more attractive target in its own right. While converting sales and cash flow to cash on the balance sheet leads me to trim my present fair value estimate, I do believe that shareholders can look forward to improving valuation multiples and Augment approval to drive a higher share price.

Please continue here:
Wright Medical Showing A Growth Core, But Transition Will Be Messy

MassDevice: MicroPort And Wright Medical Group Flip The Script

Apparently MicroPort and Wright Medical (NSDQ:WMGI) didn't get the memo – American med-tech companies are supposed to buy Chinese med-tech companies and not the other way around. But in a surprising announcement Wednesday night, the two companies revealed that MicroPort has reached an agreement to acquire Wright Medical's OrthoRecon business for $290 million in cash.

This is a bold move for both parties. It not only brings MicroPort into the global hip and knee market, but also establishes a meaningful presence for the company in the U.S. For Wright Medical, it removes a significant amount of execution risk, and makes the company a pure-play on the much faster-growing markets for orthopedic extremities and biologics.

Please continue here:
http://www.massdevice.com/blogs/massdevice/microport-and-wright-medical-group-flip-script

MassDevice: Smarter Strategic Moves Bode Well For Wright Medical

There's a saying in the markets that there's always a bull market somewhere. Along similar lines, it's almost always possible to find areas of growth in otherwise stagnant med-tech markets. While the overall performance of the orthopedic market has been pretty uninspiring of late, the extremities sub-sectors (upper and lower extremities) have been notable exceptions.

Growing share in lower extremities is not the only positive factor at work in pushing Wright Medical (NSDQ:WMGI) to new highs. After years of pursuing what I believe to have been an unrealistic business model and a scandal tied to the industry-wide practice of improper payments to surgeons to use their implants, CEO Bob Palmisano has the company on the right track again. Two years into his tenure as CEO, there's still ground to cover in terms of margins, but the company's sales strategy for recon, its growth in extremities, and the assets acquired from BioMimetic Therapeutics make this a name to watch in the sleepy ortho sector.

Please follow this link to read the full article:
http://www.massdevice.com/blogs/massdevice/smarter-strategic-moves-bode-well-wright-medical

Seeking Alpha: Maybe More Than Meets The Eye To Stryker's Numbers

With a majority of the major orthopedic and medical technology companies having reported now, it's pretty clear that key markets like orthopedics and surgery are still seeing pretty sluggish performance. Yet the stocks of companies like Stryker (SYK), Zimmer (ZMH), and Covidien (COV) have done pretty well over the last year, as investors look for performance to rebound and return to names that were beaten up a little too much. Though I still think there's money to be made in Stryker's stock, the gains are likely to be more gradual from here.

Click below to continue:
Maybe More Than Meets The Eye To Stryker's Numbers

Seeking Alpha: Zimmer Is A Pure Play On A (Presently) Rotten Market

Waiting for a recovery in the orthopedics industry has been about as entertaining as watching paint dry, without the benefit of enjoying the fumes. Although it is certainly true that there are millions of Americans walking around on old knees and hips, and the number of 65+ year-old customers is on the increase, the reality is that a broadly favorable demographic push means nothing over the scale of a few years.

That makes Zimmer (ZMH) a tricky stock to assess. It certainly seems cheap relative to its likely future free cash flows, but the company's intense (70%-plus) exposure to hip and knee reconstruction is keeping a lid on enthusiasm in there here and now.

Read the full piece here:
Zimmer Is A Pure Play On A (Presently) Rotten Market

Seeking Alpha: Integra LifeSciences Sputters At Year End

When last I wrote on Integra LifeSciences (IART), I was worried about what looked liked slowing momentum in the company's orthopedics business, excessively optimistic guidance, and some issues with the FDA. Both of these concerns fell to earth with a “thud” Thursday night as the company announced a very poor performance for the fourth quarter and a formal warning letter from the FDA concerning its Plainsboro facility.

Bad To Worse In Q4
Integra LifeSciences is hardly alone in seeing weaker trends lately in markets like orthopedics and neurology. Much larger companies like Johnson & Johnson (JNJ), Medtronic (MDT), and Stryker (SYK) have been reporting the same sort of malaise as hospitals and distributors pare down inventory in the face of low patient volumes and a less certain reimbursement environment.

Please follow this link for the full piece:
Integra LifeSciences Sputters At Year End, But Is Still Undervalued

Seeking Alpha: Integra Hitting That Same Ortho Wall

There was no shortage of skeptics regarding Integra LifeSciences' (Nasdaq: IART) aggressive build-by-acquisition strategy during the past decade, myself included. To management's credit, while the company has quite a lot of debt for a med-tech, it has emerged as an appealing niche player in attractive markets in orthopedics and neurosurgery. While the company is currently suffering from the same sluggish markets that have stalled out bigger rivals like Johnson & Johnson (NYSE: JNJ), Stryker (NYSE: SYK), and Medtronic (NYSE: MDT), this is an interesting stock to watch for investors who want to go a little deeper than the well-known big-cap names.

Reality Bites Into The Third Quarter
In an orthopedics world where hip, knee, and spine competitors like Biomet, JNJ, Medtronic, Stryker, Zimmer (NYSE: ZMH), and Smith & Nephew (NYSE: SNN) largely seem to be spinning their wheels, Integra had looked pretty good with a growing spine, orthobiologics, and extremities business. Unfortunately, it looks like the ortho malaise is spreading to the extremities.

Read more here:
Integra Hitting That Same Ortho Wall