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Weekly News, Analysis, and Commentary

Power Rankings

Power Rankings: September 15th, 2014

Robin Young’s Entirely Subjective Ordering of Public Orthopedic Companies

This Week: A Chinese vacuum cleaner called Alibaba is coming into the capital markets this week to suck up billions of dollars of loose capital. New rules for medical device companies in China—no brand names or OUC (outside China) manufactured products (see Walter’s article this week – sobering). Ràng rén jīngyà! (“Yikes!”)

Rank Last Week Company TTM Op
Margin
30-Day Change
Comment
1
1
Stryker
11.52%
3.36%
SNN CFO: we are a “‘net buyer’ of high growth strategic assets rather than a company ‘for sale’”. Did SNN ‘Heisman’ SYK?
2
2
Zimmer
29.12
7.43
Zimmer + Biomet. The deal is in the home stretch.
3
3
Integra LifeSciences
12.57
1.80
Cheapest equity in OTW universe due, almost exclusively, to Wall Street’s earnings forecast. Overly ambitious?
4
5
NuVasive
8.01
3.00
One year ago NUVA shocked Wall Street by beating Q3 estimates by 65%. This year? Will outperform expectations again.
5
9
Globus Medical
29.68
5.22
Finally! Wall Street is focusing on GMED earnings power—which should push up GMED’s PE and PEG ratios.
6
4
Medtronic
28.84
2.71
Lowest PE ratio in all of orthopedics—$1 earned at MDT is less valuable than, for example, $1 from Orthofix. Crazy.
7
6
Exactech
10.26
1.17
Valuation for EXAC has always been low. Trading is thin. If Q3 sales are strong, bargain hunters should jump in.
8
NR
Conmed
10.51
6.31
Is the soap opera at CNMD over? CEO is gone. Corporate governance changed. Four directors retired. And stock’s up.
9
7
Symmetry Medical
6.55
(3.18)
Market cap is $343 million. Cash coming in from OEM deal is $450 million. SMA is worth 76 cents on the dollar in cash??
10
8
Johnson & Johnson
26.58
2.79
Institutions feel warm and fuzzy with JNJ in their portfolios. But at these prices it’s barely in the top ten in terms of valuation.

Top Performers Last 30 Days

Company Symbol
Price
Mkt Cap
30-Day Chg
1 Tornier N.V. TRNX $24.77 $1,211 13.42%
2 Wright Medical WMGI $32.47 $1,638 9.84%
3 RTI Biologics Inc RTIX $5.24 $298 9.39%
4 LDR Holding Corp. LDRH $27.34 $710 8.88%
5 Alphatec Holdings ATEC $1.68 $165 7.69%
6 Zimmer Holdings ZMH $104.94 $17,726 7.43%
7 ConMed CNMD $39.78 $1,088 6.31%
8 Globus Medical GMED $19.95 $1,883 5.22%
9 MiMedx Group MDXG $7.22 $763 3.88%
10 Stryker SYK $83.46 $31,597 3.36%

Worst Performers Last 30 Days

Company Symbol
Price
Mkt Cap
30-Day Chg
1 Baxano Surgical Inc BAXS $0.33 $16 -16.97%
2 MicroPort Scientific 853 $0.52 $734 -14.53%
3 Aurora Spine ASG $1.69 $26 -10.93%
4 CryoLife CRY $9.86 $275 -6.01%
5 Orthofix OFIX $32.47 $599 -3.88%
6 K2M Group Holdings KTWO $14.11 $524 -3.42%
7 TiGenix TIG.BR $0.72 $116 -3.32%
8 Symmetry Medical SMA $9.14 $343 -3.18%
9 Exactech EXAC $24.28 $334 1.17%
10 Smith & Nephew SNN $87.72 $15,667 1.29%

Lowest Price / Earnings Ratio (TTM)

Company Symbol
Price
Mkt Cap
P/E
1 Medtronic MDT $65.19 $63,855 16.75
2 Globus Medical GMED $19.95 $1,883 16.93
3 Johnson & Johnson JNJ $104.58 $294,946 17.92
4 Zimmer Holdings ZMH $104.94 $17,726 18.82
5 Stryker SYK $83.46 $31,597 19.97

Highest Price / Earnings Ratio (TTM)

Company Symbol
Price
Mkt Cap
P/E
1 Orthofix OFIX $32.47 $599 270.88
2 MicroPort Scientific 853 $0.52 $734 94.87
3 NuVasive NUVA $37.40 $1,757 71.51
4 Symmetry Medical SMA $9.14 $343 46.88
5 Smith & Nephew SNN $87.72 $15,667 29.96

Lowest P/E to Growth Ratio (Earnings Estimates)

Company Symbol
Price
Mkt Cap
PEG
1 CryoLife CRY $9.86 $275 0.99
2 Exactech EXAC $24.28 $334 1.12
3 Globus Medical GMED $19.95 $1,883 1.26
4 ConMed CNMD $39.78 $1,088 1.74
5 Zimmer Holdings ZMH $104.94 $17,726 2.20

Highest P/E to Growth Ratio (Earnings Estimates)

Company Symbol
Price
Mkt Cap
PEG
1 Orthofix OFIX $32.47 $599 14.72
2 MicroPort Scientific 853 $0.52 $734 6.32
3 NuVasive NUVA $37.40 $1,757 5.85
4 Symmetry Medical SMA $9.14 $343 3.91
5 Smith & Nephew SNN $87.72 $15,667 2.97

Lowest Price to Sales Ratio (TTM)

Company Symbol
Price
Mkt Cap
PSR
1 Baxano Surgical Inc BAXS $0.33 $16 0.80
2 Alphatec Holdings ATEC $1.68 $165 0.80
3 Symmetry Medical SMA $9.14 $343 0.85
4 Bacterin Intl Holdings BONE $5.04 $34 0.99
5 RTI Biologics Inc RTIX $5.24 $298 1.23

Highest Price to Sales Ratio (TTM)

Company Symbol
Price
Mkt Cap
PSR
1 TiGenix TIG.BR $0.72 $116 20.26
2 MiMedx Group MDXG $7.22 $763 9.63
3 MicroPort Scientific 853 $0.52 $734 6.41
4 LDR Holding Corp. LDRH $27.34 $710 6.36
5 Wright Medical WMGI $32.47 $1,638 6.09

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