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Weekly News, Analysis, and Commentary

Power Rankings

Power Rankings: July 22nd, 2014

Robin Young’s Entirely Subjective Ordering of Public Orthopedic Companies

This Week: We’re in the thick of earnings season and the financial results so far (with Biomet, Stryker and DePuy reporting) indicate that pricing pressures are continuing to affect results. Interestingly, sales are holding up well which indicates that demand is quite healthy, but pricing pressures are affecting profit margins. Overall, investors are letting values drift south. If they are buying at all, they seem to be moving to lower valuation orthopedic equities.

Rank Last Week Company TTM Op
Margin
30-Day Change
Comment
1
1
Symmetry Medical
6.55%
0.23%
In contrast to the overall orthopedic theme of margin pressure, SMA is about margin expansion due to Clamonta sale and other factors.
2
2
Medtronic
28.84
(2.21)
MDT and Covidien is evolving into an extended meditation on tax inversion and what, if anything, Congress can do to change it.
3
7
Integra LifeSciences
11.77
(0.84)
The consensus of Wall Street’s analysts is the IART will report 11-12% sales growth for Q2. The real question is: will IART expand or contract margins?
4
3
Orthofix
6.75
(0.98)
Can OFIX beat $100 million sales this quarter? It’s very close. Last quarter, management beat consensus by 32%. This quarter should be interesting.
5
9
Zimmer
28.42
(3.39)
Biomet’s return to profitability on the eve of a merger with ZMH doesn’t hurt. Still waiting for definitive FTC “ok.” But if they have to divest of anything, they can do that.
6
6
Stryker
15.71
(2.69)
MAKO, Small Bone Innovations, Patient Safety Technologies, Pivot Medical and Berchtold. Lots of acquisitions. Lots of integration.
7
5
Exactech
10.15
(4.31)
Checking consensus estimates for Q2 reveals an interesting anomaly; 11% earnings growth on 5% sales growth. Margin expansion.
8
4
NuVasive
6.05
(1.32)
On a comparative valuation basis, NUVA not exactly the blue light special anymore. Most analysts expect down earnings (YOY) for Q3.
9
10
Conmed
35.16
0.57
Now buyers are coming back into CNMD. Perhaps selling pressure has ended or perhaps Q2 will bring investors a pleasant surprise.
10
8
Johnson & Johnson
26.58
(0.98)
Trauma sales rose 7% in Q2 which tells us that Synthes integration issues are history. Large joint recon also up nicely.

Top Performers Last 30 Days

Company Symbol
Price
Mkt Cap
30-Day Chg
1 MiMedx Group MDXG $6.61 $698 5.76%
2 Wright Medical WMGI $31.82 $1,588 2.15%
3 ConMed CNMD $44.01 $1,198 0.57%
4 CryoLife CRY $9.01 $253 0.56%
5 Symmetry Medical SMA $8.87 $333 0.23%
6 Integra LifeSciences IART $47.32 $1,541 -0.84%
7 Smith & Nephew SNN $89.53 $16,011 -0.86%
8 Johnson & Johnson JNJ $101.80 $288,002 -0.98%
9 Orthofix OFIX $34.19 $630 -0.98%
10 NuVasive NUVA $33.61 $1,566 -1.32%

Worst Performers Last 30 Days

Company Symbol
Price
Mkt Cap
30-Day Chg
1 Aurora Spine ASG $2.16 $34 -21.71%
2 TiGenix TIG.BR $0.76 $121 -17.74%
3 Baxano Surgical Inc BAXS $0.51 $25 -16.44%
4 LDR Holding Corp. LDRH $22.35 $583 -13.44%
5 Bacterin Intl Holdings BONE $0.66 $36 -9.59%
6 RTI Biologics Inc RTIX $4.24 $240 -7.63%
7 MicroPort Scientific 853 $0.62 $879 -6.81%
8 Tornier N.V. TRNX $21.95 $1,066 -6.64%
9 Exactech EXAC $23.76 $325 -4.31%
10 Zimmer Holdings ZMH $102.44 $17,191 -3.39%

Lowest Price / Earnings Ratio (TTM)

Company Symbol
Price
Mkt Cap
P/E
1 Medtronic MDT $62.36 $62,123 16.45
2 Johnson & Johnson JNJ $101.80 $288,002 17.49
3 Zimmer Holdings ZMH $102.44 $17,191 18.39
4 Stryker SYK $82.16 $31,146 19.48
5 Exactech EXAC $23.76 $325 19.55

Highest Price / Earnings Ratio (TTM)

Company Symbol
Price
Mkt Cap
P/E
1 Orthofix OFIX $34.19 $630 285.23
2 NuVasive NUVA $33.61 $1,566 108.43
3 Symmetry Medical SMA $8.87 $333 79.90
4 MicroPort Scientific 853 $0.62 $879 34.52
5 Smith & Nephew SNN $89.53 $16,011 28.44

Lowest P/E to Growth Ratio (Earnings Estimates)

Company Symbol
Price
Mkt Cap
PEG
1 Exactech EXAC $23.76 $325 1.09
2 Globus Medical GMED $23.08 $2,157 1.47
3 ConMed CNMD $44.01 $1,198 1.92
4 Stryker SYK $82.16 $31,146 2.16
5 Zimmer Holdings ZMH $102.44 $17,191 2.20

Highest P/E to Growth Ratio (Earnings Estimates)

Company Symbol
Price
Mkt Cap
PEG
1 Orthofix OFIX $34.19 $630 15.50
2 NuVasive NUVA $33.61 $1,566 9.70
3 CryoLife CRY $9.01 $253 6.80
4 Symmetry Medical SMA $8.87 $333 6.66
5 Smith & Nephew SNN $89.53 $16,011 2.87

Lowest Price to Sales Ratio (TTM)

Company Symbol
Price
Mkt Cap
PSR
1 Alphatec Holdings ATEC $1.33 $130 0.64
2 Symmetry Medical SMA $8.87 $333 0.83
3 Bacterin Intl Holdings BONE $0.66 $36 1.09
4 RTI Biologics Inc RTIX $4.24 $240 1.10
5 Baxano Surgical Inc BAXS $0.51 $25 1.24

Highest Price to Sales Ratio (TTM)

Company Symbol
Price
Mkt Cap
PSR
1 TiGenix TIG.BR $0.76 $121 21.27
2 MiMedx Group MDXG $6.61 $698 10.39
3 Wright Medical WMGI $31.82 $1,588 6.18
4 MicroPort Scientific 853 $0.62 $879 5.75
5 LDR Holding Corp. LDRH $22.35 $583 5.22

PSR: Aggregate current market capitalization divided by aggregate sales and the calculation excluded the companies for which sales figures are not available.