Starting the lightning round of Mad Money on October 7, a caller mentioned MiniMed Group, Inc. (NASDAQ:MMED). Jim Cramer quickly responded:
Oh, Medtronic got rid of it, and I don’t want anything to do with it. I do like Medtronic, but I do not like MiniMed. I didn’t even like it in the old days.
Cramer’s description needs a qualification. Medtronic plc (NYSE:MDT) retained approximately 90% of MiniMed after its March initial public offering. It subsequently launched an exchange offer to complete the separation.
Medtronic (NYSE:MDT) ranks eighth on our list of the best healthcare equipment stocks to buy according to hedge funds. See which seven stocks rank higher than MDT and whether MMED also made the list.
MiniMed’s New Products Are Supporting Growth
MiniMed Group, Inc. reported fiscal first-quarter 2027 revenue of $843 million, up 17% as reported and 16% organically. An extra fiscal week contributed approximately 4 to 6 percentage points. Excluding that benefit, organic growth remained in the low double digits.
Its product development also advanced. MiniMed submitted its Fit patch pump to the FDA ahead of its previous timetable, while Flex received European CE marking. The company raised its fiscal 2027 organic growth forecast to approximately 10.5%, although that outlook includes a benefit from the extra week. The product story extends beyond regulatory milestones. MiniMed’s new pump lineup has also changed who is choosing its systems, offering another way to assess the demand behind its growth.
Medtronic plc (NYSE:MDT) offers a broader collection of businesses. Its fiscal first-quarter 2027 revenue reached approximately $9.8 billion, with adjusted earnings of $1.45 per share. Cardiovascular organic growth was 18.9%. However, its reported results still included the diabetes business, and an extra week contributed approximately $570 million to organic revenue growth. These figures should not be treated as a clean post-separation comparison. Cramer had already called Medtronic a “quandary” despite its stronger results. That discussion also revealed a concern behind his preference for separating the diabetes business.
The Valuation Gap Comes With Different Earnings Risks
MiniMed Group, Inc. at approximately 31x forward earnings, versus 14.6x for Medtronic plc (NYSE:MDT). MiniMed’s higher multiple places more weight on future profit growth, whereas Medtronic offers a lower valuation across a more diversified business. Yet Medtronic’s lower multiple has not made Cramer an unreserved buyer. When asked about it earlier in October, he identified a frustration that strong earnings had not resolved.
MiniMed’s latest quarterly earnings were approximately break-even on a GAAP basis, despite its revenue growth. Regulatory review and successful product launches remain necessary steps before its development pipeline can deliver the expected commercial benefits. Nine analysts raised their MiniMed price targets after the quarter, but the cash-flow figures require a closer reading. The distinction matters when judging what its recent growth says about the eventual standalone business.
For Medtronic, completing the separation does not by itself guarantee better performance. Its transaction disclosures identify execution risk and uncertainty over whether the anticipated benefits will be realized. Investors also need to distinguish forecasts covering the consolidated company from those highlighting the eventual business mix.
MiniMed’s Short Interest Requires Extra Context
Insider Monkey recorded 26 hedge fund holders in MiniMed Group, Inc. during Q2, compared with 22 in Q1. Medtronic plc’s (NYSE:MDT) count rose to 67 from 60. Short interest was 47.64% of MiniMed’s float and 1.35% of Medtronic’s. MiniMed’s figure is unusually high, but it should not automatically be read as a pure vote against the business. Medtronic’s large retained holding limited the publicly available float, while exchange-offer trading can involve hedging. The data provided do not establish how much of the short position reflects those activities.
Cramer’s preference for Medtronic comes with a clear valuation advantage. Nevertheless, MiniMed has growing sales and new products that deserve consideration beyond his dismissal. Its harder task is turning that progress into sustained profits as the separation proceeds.
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