4. Globus Medical, Inc. (NYSE:GMED)
Number of Hedge Fund Holders: 29
Globus Medical, Inc. (NYSE:GMED) is a medical device company that produces healthcare solutions and implants for patients with musculoskeletal disorders, spine problems, and orthopedic trauma. The company distributes its products in the United States and international markets.
On March 4, Globus Medical (NYSE:GMED) expanded its share repurchase program by authorizing the buy back of $200 million in additional common stock. The company now has $295 million available for repurchases. Its market cap of $7.75 billion has increased 17% as compared to last year.
Wells Fargo analyst Vik Chopra on March 28 initiated coverage of Globus Medical (NYSE:GMED) with an Overweight rating and an $80 price target. The analyst cited the company’s consecutively strong EBITDA margin profile, consistent above-market spine growth and share gains, and its unique selling advantage as one of the two organizations to offer a spine robot. With new offerings in its Spine segment, the analyst expects 150 bps of growth in 2023.
According to the fourth quarter database of Insider Monkey, 29 hedge funds were bullish on Globus Medical (NYSE:GMED), with combined stakes valued at $231.3 million. Brian Ashford-Russell and Tim Woolley’s Polar Capital owned the biggest position in the company, holding 754,204 shares worth $54.4 million.
Here is what Madison Small Cap Fund has to say about Globus Medical, Inc. (NYSE:GMED) in their Q4 2020 investor letter:
“Healthcare continued its streak of underperformance in the fourth quarter. The biotech industry component of the Russell 2000 was up 34% for the quarter and 53% for the year. While we have become more open to investing in this space where appropriate, we prefer molecular diagnostics given less regulatory risk and better revenue diversification. With the new administration comes a shift in healthcare philosophy. We believe that further access to care and coverage expansion will benefit some parts of the sector. However, the risk of further reimbursement cuts, particularly in pharmaceuticals, will bear monitoring.
Our favorite healthcare stock for 2021 is Globus Medical, a provider of spine implants and robotic solutions in the orthopedic industry. This stock has been a disappointing investment in the three years that we have held it. Though, the company itself has executed extremely well. We think this name is a “coiled spring” in a reopening scenario as management played aggressive offense in 2020. They aggressively have grown their sales force and did not hunker down during the pandemic. Recent quarters suggest that the company has taken considerable share, and this should bear fruit as surgical volumes resume in 2021 and 2022.”
