Medtronic, Inc. (MDT): Is This Stock in Your Portfolio? If Not, Then Consider Getting Some

Page 1 of 2

The market gives investors a good number of chances to buy stocks when they are beaten down, and one such opportunity presented itself when medical devices maker Medtronic, Inc. (NYSE:MDT) slipped in February this year. There were concerns about the company’s business slowing down, but its fourth-quarter results, which were released in May, put such doubts to rest.

Medtronic’s huge size and diversification have helped the company overcome challenges, so it is not surprising that shares have continued their steady appreciation so far this year, rising almost 30%. And once you consider the company’s prospects, it won’t be surprising if the stock continues to fly higher.

An important turnaround

Medtronic, Inc. (NYSE:MDT)

For starters, Medtronic, Inc. (NYSE:MDT)’s implantable cardioverter defibrillators (ICD) and pacemakers, which were the primary reason behind the bearishness of analysts on the stock, are back on the growth path. Sales of defibrillators grew 2% in the previous quarter while pacemaker revenue improved 5% (both excluding currency effects) from the year-ago period.

These improvements are really significant, as both these products were struggling but now seem to be growing again as Medtronic, Inc. (NYSE:MDT) gained market share, and more importantly, helped revenue from its Cardiac Rhythm Disease Management (CRDM) business grow 4% (excluding currency effects). This should have come as welcome relief to Medtronic investors as CRDM has struggled of late.

This market share gain in the CRDM doesn’t come as a surprise as Medtronic, Inc. (NYSE:MDT) was well-positioned to gain from the deficiencies in the ICD offering of its competitor, St. Jude Medical, Inc. (NYSE:STJ). St. Jude’s ICD, the Riata, has faced difficult times and was the subject of a recall in late 2011. The leads inside the defibrillator could break out of the insulation from the inside, according to The Wall Street Journal, and this should have played a part in Medtronic’s share gain.

Now, Medtronic, Inc. (NYSE:MDT) is looking to maintain its new-found momentum in ICD by launching new and improved devices, such as the Evera ICD. Evera would be of smaller size, and the company has made an effort to increase patient comfort through it. Such moves should help Medtronic keep its market share intact in this segment.

Growth ahead

Next, Medtronic has been aggressively focusing on emerging markets to drive international growth. The company’s international revenue has grown consistently in a range of 6%-8% for almost three years, and emerging markets have been the primary drivers of this growth. Going forward, the company is confident of keeping its momentum intact as it increases its presence and builds awareness.

Moreover, Medtronic, Inc. (NYSE:MDT) has been making some notable moves of late as far as new products are concerned. Its advanced insulin pump, which can automate delivery of insulin for Type 1 diabetics through a “threshold suspend” feature is being touted as a breakthrough technology. The company has filed for FDA approval of the device and if approved, it would be a big boost for it.

Also, Medtronic recently received the CE mark for its CoreValve device in Europe, which should improve its standing in the competitive heart valve market in Europe. In addition, its Pacific Plus PTA catheter also received the go-ahead from the FDA along with the European CE mark. These product moves should complement Medtronic’s global presence and help its revenue grow going forward.

Risks to consider

However, being a medical devices manufacturer, Medtronic, Inc. (NYSE:MDT) isn’t immune to the perils of the industry. For instance, the company’s spine business has been a mixed performer and a recent revelation that its Infuse bone graft product, which accelerates bone growth after spinal surgery, doesn’t enjoy an advantage over traditional bone graft procedures led to a dip in share price and might lead to a decline in sales of the product.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!