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Weekly News, Analysis, and Commentary

Power Rankings

Power Rankings: June 22nd, 2015

Robin Young's Entirely Subjective Ordering of Public Orthopedic Companies

This Week: Health care companies in the S&P 500, which include everything from health insurers to medical device manufacturers to biotechnology companies, are up 26% in the past year. That’s the hottest of all S&P sectors. Can it continue? Maybe not. Ortho companies are trading at an average future P/E is 17.6x. Average PSR is 4.01 and average PEG is 3.34x. And revenues are only growing at low single digits.

Rank Last Week Company TTM Op
Margin
30-Day Change
Comment
1
1
Stryker
22.78%
0.10%
Not only the lowest valuation in ortho, but also a great cash flow story with a 23% operating margin.
2
2
Integra LifeSciences
13.74
(1.24)
Second lowest valuation in ortho. Re-organizing for higher rates of growth and profitability. SeaSpine spin off nearly done.
3
3
ConMed
10.41
4.13
Value of ConMed is up 34% in the last year as investors bet on new management unlocking hidden value.
4
6
RTI Biologics
7.50
4.82
Over the last four quarter RTI has consistently outperformed analysts’ expectations. Analysts forecasting 8.30% sales growth this year.
5
4
Globus Medical
30.82
0.19
Analysts increased their earnings outlook slightly for 2015, from $1.02 to $1.04. Sales still expected to grow about 9%.
6
5
NuVasive
9.30
2.77
The most expensive, in valuation terms, equity on the Power Rankings. But new management brings with it new possibilities.
7
8
Zimmer
30.35
(1.47)
One of Wall Street’s savviest investors, Eric Mindich, has bought a huge stake in ZMH. Interesting timing.
8
7
Medtronic
27.92
(2.64)
Medtronic is officially an Irish company. In celebration, it raised the dividend 25% and announced a $6 billion stock buyback.
9
10
Smith & Nephew
20.19
(3.35)
Arthrex just paid SNN $99 million as part of a patent infringement settlement. That’s a lot of suture anchors.
10
9
Johnson & Johnson
28.44
(3.61)
It is so interesting to see how JNJ zigs while other ortho equities zag. JNJ’s stock clearly marches to different set of bongo drums.

Top Performers Last 30 Days

Company Symbol
Price
Mkt Cap
30-Day Chg
1 Orthofix OFIX $34.42 $646 5.49%
2 MiMedx Group MDXG $11.02 $1,197 5.40%
3 RTI Biologics Inc RTIX $6.74 $387 4.82%
4 ConMed CNMD $58.43 $1,613 4.13%
5 LDR Holding Corp LDRH $43.12 $1,146 3.70%
6 TiGenix TIG.BR $0.82 $132 3.19%
7 NuVasive NUVA $49.66 $2,401 2.77%
8 Tornier N.V. TRNX $26.36 $1,292 2.61%
9 Wright Medical WMGI $26.90 $1,383 2.28%
10 CryoLife CRY $11.20 $317 1.73%

Worst Performers Last 30 Days

Company Symbol
Price
Mkt Cap
30-Day Chg
1 Aurora Spine ASG $0.57 $11 -20.03%
2 Alphatec Holdings ATEC $1.31 $131 -9.03%
3 MicroPort Scientific 853 $0.51 $725 -6.39%
4 Bacterin Intl Holdings BONE $3.40 $24 -5.29%
5 Johnson & Johnson JNJ $99.86 $276,916 -3.61%
6 Smith & Nephew SNN $34.37 $15,370 -3.35%
7 Medtronic MDT $76.71 $109,055 -2.64%
8 Exactech EXAC $20.99 $294 -1.78%
9 Zimmer Holdings ZMH $112.66 $19,198 -1.47%
10 Integra LifeSciences IART $67.58 $2,226 -1.24%

Lowest Price / Earnings Ratio (TTM)

Company Symbol
Price
Mkt Cap
P/E
1 Johnson & Johnson JNJ $99.86 $276,916 16.84
2 Exactech EXAC $20.99 $294 18.09
3 Globus Medical GMED $25.78 $2,447 19.08
4 Zimmer Holdings ZMH $112.66 $19,198 19.37
5 Stryker SYK $96.88 $36,660 22.14

Highest Price / Earnings Ratio (TTM)

Company Symbol
Price
Mkt Cap
P/E
1 MiMedx Group MDXG $11.02 $1,197 110.20
2 NuVasive NUVA $49.66 $2,401 102.43
3 CryoLife CRY $11.20 $317 59.62
4 RTI Biologics Inc RTIX $6.74 $387 44.11
5 ConMed CNMD $58.43 $1,613 31.58

Lowest P/E to Growth Ratio (Earnings Estimates)

Company Symbol
Price
Mkt Cap
PEG
1 Globus Medical GMED $25.78 $2,447 1.56
2 CryoLife CRY $11.20 $317 1.99
3 Exactech EXAC $20.99 $294 2.03
4 ConMed CNMD $58.43 $1,613 2.22
5 Stryker SYK $96.88 $36,660 2.51

Highest P/E to Growth Ratio (Earnings Estimates)

Company Symbol
Price
Mkt Cap
PEG
1 MiMedx Group MDXG $11.02 $1,197 7.35
2 NuVasive NUVA $49.66 $2,401 6.70
3 Smith & Nephew SNN $34.37 $15,370 4.79
4 Zimmer Holdings ZMH $112.66 $19,198 3.76
5 Medtronic MDT $76.71 $109,055 3.46

Lowest Price to Sales Ratio (TTM)

Company Symbol
Price
Mkt Cap
PSR
1 Alphatec Holdings ATEC $1.31 $131 0.63
2 Bacterin Intl Holdings BONE $3.40 $24 0.67
3 Exactech EXAC $20.99 $294 1.19
4 RTI Biologics Inc RTIX $6.74 $387 1.43
5 Orthofix OFIX $34.42 $646 1.65

Highest Price to Sales Ratio (TTM)

Company Symbol
Price
Mkt Cap
PSR
1 TiGenix TIG.BR $0.82 $132 15.80
2 MiMedx Group MDXG $11.02 $1,197 8.59
3 LDR Holding Corp LDRH $43.12 $1,146 8.57
4 K2M Group Holdings KTWO $25.10 $995 6.32
5 Medtronic MDT $76.71 $109,055 5.38

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