Seeking Alpha: Intuitive Surgical Set To Regain Momentum In 2015

With the exception of a run in the first quarter of 2014, the space between mid-2013 and mid-2014 was a dead zone for Intuitive Surgical (NASDAQ:ISRG) shares as it became clear that growth at this traditionally high-growth med-tech was slowing. System placements declined sequentially for five of six quarters starting in the first quarter of 2013 and procedure growth slowed as the medical community became less aggressive with prostatectomy procedures and daVinci penetration topped out.

Sentiment has been improving since mid-2014, though, helped by growing penetration in general surgery and optimism that the new Xi and Sp platforms and greater overseas sales efforts will reignite system placements on an extended basis. Although Intuitive will likely start seeing real competition relatively soon, this remains a pretty special company within the med-tech space. The trouble is how much to pay for those special qualities, as the Street is already back to expecting quite a lot of growth from this company.

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Intuitive Surgical Set To Regain Momentum In 2015

Seeking Alpha: AngioDynamics Still Looking For Inflection

What AngioDynamics (NASDAQ:ANGO) does is not easy. This small med-tech company competes with huge players like Bard (NYSE:BCR) and Covidien (NYSE:COV) (as well as Teleflex (NYSE:TFX)) in markets that are not growing all that fast and where a large sales/marketing effort and the ability to bundle can make a significant difference in closing sales. AngioDynamics hasn't always helped their own cause either, with issues in manufacturing, quality control (including a recent FDA Warning Letter), and financial reporting.

The company is making progress, though, and seems to be nearing a point where margins and profits could grow disproportionately to incremental revenue growth. The company has also managed to add several products to its portfolio that offer real benefits to health care professionals (and savings to the facilities) and their patients. I'm not so crazy about the valuation here, but if management could push revenue growth above 5% the shares could still do rather well.

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AngioDynamics Still Looking For Inflection

The Motley Fool: Why the Market Is Wrong About Intuitive Surgical Stock

Investors were hoping for a good quarter from Intuitive Surgical (NASDAQ: ISRG  ) , so much so that I'm a little surprised to see such a positive market reaction to what was largely an in-line quarter and ongoing murkiness in the market outlook. Strong shipments of the Xi system are encouraging, as was the better-than-expected procedure growth, but utilization is still challenging and Johnson & Johnson (NYSE: JNJ  ) and Covidien (NYSE: COV  ) continue to highlight their own efforts to drive non-robotic minimally invasive procedures with their tools and instruments.

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Why the Market Is Wrong About Intuitive Surgical Stock

Seeking Alpha: Amidst Ongoing Doubts, Exact Sciences Still Offers Opportunity

For a modestly-sized diagnostics stock, Exact Sciences (NASDAQ:EXAS) seems to generate an above-average level of animated response (I'd say "discussion", but a quick look at the comments section of EXAS articles shows less discussion and more squabbling). I have often found that controversy can mean opportunity, as it often reflects wildly divergent viewpoints, and I continue to believe that is the case with Exact Sciences.

My thesis in brief - the Cologuard works, is a meaningful step forward in the detection, prevention, and treatment of colorectal cancer, and will be reimbursed at a rate that allows Exact Sciences to earn solid profits, though likely not as quickly as some on the Street expect. I believe these shares can trade into the high teens with an FDA approval and favorable coverage decision, and I expect the second half of this year to be a pretty active period for the company and stock.

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Amidst Ongoing Doubts, Exact Sciences Still Offers Opportunity

The Motley Fool: Johnson & Johnson Ups The Dosage

Healthcare giant Johnson & Johnson (NYSE: JNJ  ) continues to prosper by virtue of its strong pharmaceutical business as the consumer and device business continue to languish. Not only does Johnson & Johnson offer a strong internal pipeline that can help maintain that momentum, the company has more than enough liquidity to acquire/license drugs if it should want to go that route. A real turnaround in devices appears to be a ways off, though, and these shares don't scream "bargain" in the meantime.

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Johnson & Johnson Ups The Dosage

The Motley Fool: The Truth Behind Obamacare's Job-Killing Tax

Calling the implementation of the Affordable Care Act (better known as "Obamacare") controversial would be a gross understatement, but the actual effects on the med-tech space are arguably less controversial at this point. Healthcare utilization has not picked up significantly and multiple companies have reported minimal recoveries in procedure/product volumes. What's more, while there has been a wave of M&A in the sector, it has been more about leveraging costs and establishing strong positions as hospitals become increasingly aggressive.

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The Truth Behind Obamacare's Job-Killing Tax

Seeking Alpha: Owens & Minor And Medical Action Industries Find A Win-Win

Mutually beneficial deals may not be all that common in the med-tech world, but I think Owens & Minor's (OMI) acquisition of Medical Action Industries (MDCI) fits the bill. I was bullish on Medical Action Industries back in December and even though Owens & Minor is paying well above my fair value estimate, Owens & Minor has what I think is unique cost leverage in this deal to justify the price. The added value from this deal does push up my fair value estimate for Owens & Minor above today's price, but I'm still not exceptionally bullish given the harsh realities of the medical distribution industry.

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Owens & Minor And Medical Action Industries Find A Win-Win

The Motley Fool: Medtronic Inc Changes the Game

In one dramatic swoop, Medtronic (NYSE: MDT  ) answered a lot of the questions that investors had about its plans for its overseas cash balance, it's long-term growth plans, and whether it wanted to enter additional "power alley" med-tech markets. Medtronic has announced that it will be acquiring Covidien (NYSE: COV  ) in a cash-and-stock transaction that is not only a tremendously large med-tech deal, but one that makes an exceptional amount of sense. 

Medtronic has changed the med-tech game on multiple levels. Not only will the new Medtronic be the most diversified company in med-tech, with leadership in over a half-dozen major therapeutic markets, but the size of this deal may well spur actions to close the tax inversion loopholes that companies have been using to reduce their tax bills. Most importantly of all, it's a good deal for Medtronic and Covidien shareholders, though some will see the tax ramifications as less than ideal.

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Medtronic Inc Changes the Game

The Motley Fool: Is Medtronic a Buy? What Analyst Day Revealed

Medtronic's (NYSE: MDT  ) June 6 analyst day was by no means light fare, as the company crammed quite a bit of information into more than seven hours. While action-oriented investors are likely disappointed that management's commentary would seem to suggest a bid for Smith & Nephew (NYSE: SNN  ) is not too likely, management laid out a vision of an evolving global device market where Medtronic is likely to be among the few players with the scale to really cover all of the major bases. While Medtronic shares do not appear priced for supreme near-term market outperformance, they still make sense within a diversified portfolio that tends toward the conservative.

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Is Medtronic a Buy? What Analyst Day Revealed

The Motley Fool: Johnson & Johnson Focusing on Quality Over Quantity

On May 22, Johnson & Johnson (NYSE: JNJ  ) hosted an all-day analyst day for its medical device business. This meeting didn't really offer any major surprises, but did highlight management's intention to run this business with a focus on returns and scale and an understanding of where the company can (or cannot) likely earn attractive returns for shareholders. All told, this update was not especially bullish for Covidien (NYSE: COV  ) or Intuitive Surgical (NASDAQ: ISRG  ) , but it may stoke ongoing speculation as to additional areas where Johnson & Johnson may look to shrink or expand via M&A.

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Johnson & Johnson Focusing on Quality Over Quantity

The Motley Fool: Do Disappointing Earnings Create a Good Buying Opportunity?

By most standards, Covidien (NYSE: COV  ) has been a superior performer in the med-tech sector. That hasn't always shown up in the company's stock performance, however, as rebound stories like St. Jude Medical, Boston Scientific, and Bard have raced ahead. With Covidien announcing a noisy quarter with some apparent seasonal pressures on Friday, it looks as though Fools have an opportunity to add shares in a high-quality name at a pretty interesting valuation.

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Do Disappointing Earnings Create a Good Buying Opportunity?

Seeking Alpha: Noise Over DCBs Clouds An Otherwise Okay Quarter At Bard

For a company with relatively modest underlying growth trends, C.R.Bard (BCR) has generated a fair bit of enthusiasm on the Street for the enhanced growth prospects bought through M&A and the royalty stream from Gore. Among the acquired products, investors are particularly keen on the prospects for the Lutonix drug-coated balloon and management's comments on the earnings call only seemed to add more confusion to already noisy situation. Bard is not a particularly cheap stock at these levels and the company is going to need better organic growth and clear differentiation in drug-coated balloons to support further gains.

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Noise Over DCBs Clouds An Otherwise Okay Quarter At Bard

The Motley Fool: Johnson & Johnson's Earnings Report Impresses

If you're going to have a "messy" quarter, you probably couldn't do it much better than Johnson & Johnson (NYSE: JNJ  ) did in the first quarter. Devices and Consumer continue to log disappointing results, but the higher-margin Pharma business is more than making up the difference. Priced for total annual returns in the mid-to-high single digits, Johnson & Johnson isn't the cheapest health care play these days, but it remains a good all-weather pick with one of the best-growing large drug franchises. 

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Johnson & Johnson's Earnings Report Impresses

The Motley Fool: What's Behind Intuitive Surgical Inc's Revenue Miss?

If surgical robot pioneer Intuitive Surgical (NASDAQ: ISRG  ) is going to keep its heady med-tech growth stock multiple, it has to do better than this. After logging just 4% revenue growth in 2013, Intuitive's announcement of a 24% drop to start 2014 is certainly not a step in the right direction. Some of the trouble may well be from transitory issues like weather and delays tied to hospitals awaiting new product rollouts, but Wall Street is not a forgiving place when high multiple growth stories stop delivering that growth.

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What's Behind Intuitive Surgical Inc's Revenue Miss?

Seeking Alpha: Hoya's Prospects Brightened By Life Care

As the computer and display-weighted technology businesses stabilize and the life care/health care businesses grow, Hoya's (OTCPK:HOCPY) prospects have improved. Sell-side analysts still seem to have relatively restrained revenue growth expectations, despite double-digit growth in life care today, significant untapped potential in emerging markets, and both a balance sheet and cash flow profile that could support acquisitions to drive further growth.

Valuation is a little more complicated. With the shares up almost 70% over the past year (the Tokyo-listed shares, that is), the valuation is not quite so compelling but I wouldn't say the shares are overvalued. Consistently solid returns on capital would argue for an attractive discount rate, and the sell-side may well be underestimating the company's ability to grow both sales and profits.

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Hoya's Prospects Brightened By Life Care

Seeking Alpha: For Teleflex, Small Things Add Up

If companies like Intuitive Surgical and Heartware live on the "gee whiz" end of the med-tech spectrum, Teleflex (TFX) is on the other end. That is not to say that there isn't meaningful R&D and engineering going into the company's products, but categories like central venous catheters, PICCs, Foley catheters, and endotracheal tubes just don't tend to get growth-oriented med-tech investors all that excited.

Even so, Teleflex has a lot going for it. The company has been a very willing acquirer and increased investments in R&D should lead the way to more innovative new products and market share growth. In the meantime, management is focused on operating improvements that should support double-digit earnings growth. While Teleflex does not look all that cheap on a discounted cash flow basis, the company's above-average growth prospects could maintain healthy valuation multiples.

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For Teleflex, Small Things Add Up

The Motley Fool: Does This Johnson & Johnson Product Have Blockbuster Potential?

It's not often that a single clinical trial wipes out an entire therapeutic opportunity, but that is what most sell-side analysts seem to believe about Medtronic's  (NYSE: MDT  )  U.S. pivotal trial failure with its Symplicity renal denervation device. In the wake of Medtronic's surprising setback, both St. Jude Medical  (NYSE: STJ  )  and Boston Scientific  (NYSE: BSX  )  have hit "pause" on their renal denervation programs, while Covidien  (NYSE: COV  )  has chosen to tap out, ending development of its OneShot system altogether.

There may be life in the approach yet, though. Johnson & Johnson  (NYSE: JNJ  )  recently announced that it received European approval (the CE Mark) for RENLANE system, a multi-electrode RF ablation device that many people didn't even know was in development. That begs the question of whether this means there is opportunity yet in what was once touted as a multibillion-dollar area.

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Does This Johnson & Johnson Product Have Blockbuster Potential?

The Motley Fool: High Expectations for Growth: Is CR Bard Overvalued?

C.R. Bard (NYSE: BCR  ) finds itself in an interesting and unfamiliar situation – for the first time in quite a while, the Street actually has relatively demanding growth expectations. Bard has long based its business upon strong share in lower-average selling price consumables-driven businesses that don't offer spectacular underlying growth. Now management is looking to deliver more growth, as it prepares to leverage its new Lutonix drug-coated balloon and acquisitions driven by the incoming cash from Gore's patent infringement damages.

Bard has indeed returned to a level of growth that hasn't been seen in years. As is so often the case, though, my concern now is with the expectations that are getting baked into the valuation. With today's valuation not leaving much (if any) margin of safety, I'd prefer other names in the med-tech space.

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High Expectations for Growth: Is CR Bard Overvalued?

The Motley Fool: High Expectations for Growth: Is CR Bard Overvalued?

C.R. Bard (NYSE: BCR  ) finds itself in an interesting and unfamiliar situation – for the first time in quite a while, the Street actually has relatively demanding growth expectations. Bard has long based its business upon strong share in lower-average selling price consumables-driven businesses that don't offer spectacular underlying growth. Now management is looking to deliver more growth, as it prepares to leverage its new Lutonix drug-coated balloon and acquisitions driven by the incoming cash from Gore's patent infringement damages.

Bard has indeed returned to a level of growth that hasn't been seen in years. As is so often the case, though, my concern now is with the expectations that are getting baked into the valuation. With today's valuation not leaving much (if any) margin of safety, I'd prefer other names in the med-tech space.

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High Expectations for Growth: Is CR Bard Overvalued?

The Motley Fool: Intuitive Surgical, Inc.'s Growing Pains Still Painful

There's a lot about the Intuitive Surgical (NASDAQ: ISRG  ) story that feels familiar. Whether you look at recent examples, like transcatheter heart valves and left ventricular assist devices, or more distant historical examples, like stents, Intuitive Surgical has followed that familiar pattern of "you don't get it ... this changes everything and valuations don't matter" to "oh no! It's not growing to infinity!"

I don't mean to flippant about what has surely been a harrowing couple of years for Intuitive Surgical shareholders. The good news is that clinical data continue to support the argument that robotic surgery deserves its place at the table and has value to offer alongside the minimally invasive tools and approaches advanced by Johnson & Johnson (NYSE: JNJ  ) and Covidien (NYSE: COV  ) . The bad news is that the stock gets whipsawed as short term-focused analysts and institutions obsess over the next year or the next quarter and cannot look at the longer term.
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Intuitive Surgical, Inc.'s Growing Pains Still Painful