Seeking Alpha: This Bard's Tale Still Worth Hearing

Medical device manufacturer C.R. Bard (NYSE: BCR) has never been really owned for its exceptional growth potential or its exciting product lineup. What it has been appreciated for, though, is years of excellent free cash flow production, consistent performance, and a largely defensive portfolio of assets that has generated some of the best returns in the sector. While a poor operating environment has shown that Bard too is mortal, investors may yet want to consider this stock as a conservative addition to their portfolio.

One Of The Best Of The Rest
A great deal of attention in medical devices goes toward major product categories like coronary stents, cardiac rhythm management, and orthopedics, with the occasional hot growth story like surgical robotics or transcatheter heart valves. Where Bard excels, though, is in the “other” - a broad of array of devices that address significant medical issues, but just don't capture quite as much attention.

Read the full piece here:
This Bard's Tale Still Worth Hearing

Investopedia: Philips Needs A Shake Up

Although Dutch conglomerate Philips (NYSE:PHG) has bounced off the late 2008/early 2009 bottom in the stock, it has been many years since Philips was really a credible candidate for a long-term investor. Once an unquestioned leader in lighting and a strong competitor in consumer electronics, Philips has fallen victim to the bloat and malaise that seems to affect almost every conglomerate sooner or later. The question for investors now, though, is how long they are willing to wait for real signs of a new way of doing business at this company.



Weak Guidance Hamstrings the Stock
Philips surprised the market by preannouncing a disappointing second quarter. Management was sparse on details, but sales in the core lighting business only grew in the low single digits, while sales in consumer electronics have fallen from last year's level on weakness in Europe and a restructuring of the TV business.

Oddly, the company said nothing about the health care business, which is a substantial factor in sales and profits. That said, based on the performance at competitors like General Electric (NYSE:GE), Siemens (NYSE:SI), Varian (NYSE:VAR), Hologic (Nasdaq:HOLX) and ZOLL (Nasdaq:ZOLL), it would seem credible that Philips had a good, but probably not spectacular, quarter.

To read the full piece, please follow the link:
http://stocks.investopedia.com/stock-analysis/2011/Philips-Needs-A-Shake-Up-PHG-SI-GE-VAR-CREE-SNE-HOLX0623.aspx

St. Jude Is Fine Today, But What About Tomorrow?

St. Jude Medical (NYSE:STJ) is one of the relatively few large-cap medical technology companies managing to deliver ongoing growth through this tough part of the cycle. Unfortunately for shareholders, there is a great deal of uncertainty about whether St. Jude is going to continue to deliver enough growth to make the stock appealing for the long-haul. 

The Quarter That Was
St. Jude reported total revenue growth of 7% for the third quarter, with the company's large CRM (cardiac rhythm management) business growing at 7%, and the smaller atrial fibrillation and neuromodulation businesses growing 8% and 11% respectively. Relative to "same-store" results from Boston Scientific (NYSE:BSX) and off-calendar comparisons to Medtronic (NYSE:MDT), St. Jude is almost certainly capturing shares in the large and lucrative (but slow-growing) CRM market. That is a good thing, as that is 60% of the company's business.

Please see the link below for the full piece:
http://stocks.investopedia.com/stock-analysis/2010/St.-Jude-Is-Fine-Today-But-What-About-Tomorrow--STJ-BSX-MDT-AGAM-ABMD-THOR-ZOLL1021.aspx

Johnson & Johnson and Boston Scientific - Could They? Should They?

I'm sure I'm not the only person thinking about whether or not Johnson & Johnson (NYSE: JNJ) and Boston Scientific (NYSE: BSX) might end up together. I think this subject was raised recently by a long-term correspondent of mine and it's been rattling around in my brain since.

JNJ has definitely been busy of late - acquiring Micrus and publicly entering into a mating dance with vaccine biotech Crucell (Nasdaq: CRXL). Likewise, BSX has been active as well - buying Asthmatx and reportedly talking about selling its neurostim and neurovascular businesses.

So maybe it's time for these two long-time rivals to get together. It would probably cost less than $12B for JNJ ... certainly not an impossible deal to contemplate. 

Why would JNJ do this? Well, it is pretty clear from the stagnant growth at JNJ that management needs to figure out some additional ways to grow and growth-through-acquisition is a tried-and-true (if qualitatively poor) way of growing. For BSX, it would be tantamount to a mercy killing for this long-underperforming company.

Beyond that, though, JNJ did once want to get into the CRM business (by buying Guidant) until BSX pushed the bidding up to a ridiculous level - a decision that has effectively crushed BSX ever since. Beyond that beyond, there are some other compelling reasons BSX could appeal to JNJ. It would potentially reinvigorate JNJ's drug-eluting stent business, even though both JNJ and BSX are losing the race against Abbott Labs (NYSE: ABT). I hope I don't sound too cynical, though, when I suggest that combining two has-beens seldom leads to a new leader...

Stents aside, BSX does have some solid business units that would not only round out JNJ's offerings, but could represent fix-er-up turnaround opportunities (the BSX IVUS business, which has been all but ceded to Volcano (Nasdaq: VOLC) comes to mind).

I don't believe that JNJ would the only suitor for BSX, were it to become clear that BSX was amenable to a sale. Covidien (NYSE: COV) could be a consideration and maybe Stryker (NYSE: SYK) would see that as a way of achieving some major diversification (although I highly, *highly* doubt that one).

Likewise, BSX would not be the only large target that JNJ could consider. Bard (NYSE: BCR), Becton Dickinson (NYSE: BDX), and CareFusion (NYSE: CFN) could all make sense (though BDX is quite a bit larger), as well as any number of fast-growing (and expensive) smaller companies like Nuvasive (Nasdaq: NUVA) or Thoratec (Nasdaq: THOR). Hell, even ZOLL (Nasdaq: ZOLL) could make sense and JNJ's salesforce could do amazing things with the LifeVest product.

Then again, maybe JNJ buys up a few more biotechs or takes a run at a big pharmaceutical company like Genzyme (Nasdaq: GENZ) or Lilly (NYSE: LLY). But then again, here is the precise problem playing the "who might buy who" game - once you get started, it's kinda hard to stop!

All in all, the safest bet to make in M&A speculation is that nothing happens. I think a JNJ-BSX deal *could* happen, and it probably would not be the worst deal that JNJ has made. But I'm still going to bet on the side that says JNJ won't be buying BSX any time soon.


Disclosure - I own shares of JNJ

Medtronic - Life In The Crosshairs

When you execute as well as Medtronic (NYSE: MDT) has over the years, when you become a leading company in virtually every market in which you compete, you get the dubious reward of being the company everyone else wants to knock off the mountain. So far, though, Medtronic management continues to demonstrate that it is capable of taking a huge business and making it even bigger. 

The Quarter That Was 
Medtronic reported its fiscal fourth quarter results May 25. As has been the case of late, the results were "good ... but not great". Revenue was up about 6% in constant currency terms, and that was more or less in line with expectation. Likewise, bottom-line earnings per share were up 9% and two pennies higher than the average analyst estimate.  

For the full article:
http://stocks.investopedia.com/stock-analysis/2010/Medtronic---Life-In-The-Crosshairs-MDT-BSX-STJ-ZOLL-NUVA-CFN-EW0528.aspx

Please note, the editor of the piece made a small error in spelling out St. Jude as "Saint Jude".

Shopping Time In Medical Technology?

The following has been posted on Investopedia:
http://stocks.investopedia.com/stock-analysis/2010/Shopping-Time-In-Medical-Technology-MDT-VOLC-ZOLL-ABMD-THOR0506.aspx.

It is a little strange for me to see ATS Medical get a bid. We banked that company when I was just a junior analyst at Piper and the CEO/founder, Manny, was (and still is) a one-of-a-kind guy. ATSI has always been something of a sad lesson for me; sad in that it proves that the best technology/product doesn't always win and that the company with the better marketing is more likely to win. 

In any event, it's always fun to speculate on who may be next to go out in the space. I hope you enjoy the piece.  


Amidst the paper blizzard of earnings releases, a little deal in the med-tech world took place. Medical device giant Medtronic (NYSE:MDT) announced that it was buying small cardiology company ATS Medical (Nasdaq:ATSI) for about $370 million in cash and assumed debt. The deal will bring some quality heart valve technology to Medtronic and cash to long-suffering shareholders of ATS Medical.


Buy The TechnologyThe ATSI deal is a relatively minor one in the bigger scheme of things, but it does at least highlight one type of deal that could be increasingly attractive - tucking in a small company that has good technology, but has not been able to leverage it effectively. Following this mold, investors should look for companies that have acknowledged quality technology, but for whatever reasons have not been able to deliver the growth that investors want.

You can read the rest at Investopedia: http://stocks.investopedia.com/stock-analysis/2010/Shopping-Time-In-Medical-Technology-MDT-VOLC-ZOLL-ABMD-THOR0506.aspx.