A Busy Week For Philips, But Underperformance Creates Some Opportunity

This has been one of those "interesting" weeks for Philips (PHG), as increased scrutiny and criticism over the company's ventilator supply contract with the U.S. Department of Health and Human Services ultimately led to the cancellation of that contract, with less than 30% of the ventilators delivered. At the same time, the company made an acquisition in its image-guided therapeutics business that didn't get much attention but could drive some meaningful revenue down the road.

Philips shares are down about 10% since my last update (when I was basically neutral on the shares), and the shares have underperformed its medical device peers by over 15% over the past month. With that underperformance, these shares are worth a closer look as procedure counts continue to improve in the second half of the year.

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A Busy Week For Philips, But Underperformance Creates Some Opportunity