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Power Rankings: May 14th, 2012

Robin Young's Entirely Subjective Ordering of Public Orthopedic Companies

This Week: NuVasive’s phenomenal Q1 performance plus Globus’s IPO bringing fresh and enthusiastic capital into spine. By contrast MAKO, the pioneer of robotics in orthopedics, missed numbers and was hammered by, first investors—down 44%—then the plaintiff’s bar. Lesson: Sales growth plus profits attracts buyers. Missed sales growth with no profits attracts sellers and plaintiffs.

Rank	Last Week	Company	TTM Op Margin	30-Day Change	Comment
1	1	Orthofix	16.23%	10.04%	Best valuation in ortho. Building the balance sheet with Breg sale. Double-digit earnings growth this year.
2	2	Conmed	10.09	(4.88)	Second best valuation in ortho. Also making interesting strategic moves to build shareholder wealth—like cut costs and add biologics.
3	3	NuVasive	6.63	30.41	Q1’s sales and earnings surprise coincides with Globus’s IPO and is attracting new buyers into spine. Tide’s rising.
4	5	Integra LifeSciences	13.34	9.18	New FDA approval for spine. Expanding in Europe. Raised guidance. Ummm…why is IART trading at 13x this year’s EPS estimate?
5	4	Johnson & Johnson	24.93	0.33	Overall—no top line growth. No bottom line growth. But the dividend grows 7%. Why split JNJ up? To uncover growth—which is hidden somewhere in Indiana.
6	7	Symmetry Medical	5.29	14.00	SMA’s strategic moves are paying off in this tough large joints market. Gross margin rose 500 basis points in Q1.
7	6	Zimmer	24.95	(2.04)	Funny headline about ZMH: A stock to forget you own for the next 10 years. Exactly right.
8	8	Stryker	23.68	(1.21)	Also a stock to forget you own for the next 10 years. Providing they have a CEO that will stay 10 years. Will it be an insider?
9	10	Medtronic	28.24	0.82	Lowest P/E in ortho, lowest PE to growth rate too. High PSR however. Why the difference? 28% profit margins.  Cash pours in.
10	9	Smith & Nephew	21.50	0.51	BioVentus spin off bold concept which should pay off in 3 to 5 to 7 years. Should have done this with ATSI? Or Richards?

Top Performers Last 30 Days

	Company	Symbol	Price	Mkt Cap	30-Day Chg
1	Kensey Nash	KNSY	$38.50	$335	34.80%
2	NuVasive	NUVA	$20.67	$892	30.41%
3	Symmetry Medical	SMA	$8.06	$295	14.00%
4	Wright Medical	WMGI	$20.91	$822	12.18%
5	Orthofix	OFIX	$39.45	$739	10.04%
6	Integra LifeSciences	IART	$35.32	$954	9.18%
7	Exactech	EXAC	$16.36	$216	8.63%
8	RTI Biologics Inc	RTIX	$3.72	$208	6.29%
9	TranS1	TSON	$3.53	$96	5.69%
10	Medtronic	MDT	$38.03	$39,574	0.82%

Worst Performers Last 30 Days

	Company	Symbol	Price	Mkt Cap	30-Day Chg
1	Mako Surgical	MAKO	$23.20	$988	-43.68%
2	Bacterin International Holdings	BONE	$1.61	$68	-33.20%
3	TiGenix	TIG.BR	$0.66	$60	-20.14%
4	Alphatec Holdings	ATEC	$1.92	$172	-14.29%
5	Tornier N.V.	TRNX	$20.98	$825	-13.45%
6	Conmed	CNMD	$27.51	$778	-4.88%
7	Zimmer Holdings	ZMH	$61.90	$10,903	-2.04%
8	Synthes	SYST.VX	$169.36	$20,116	-1.36%
9	Stryker	SYK	$53.18	$20,258	-1.21%
10	ArthroCare	ARTC	$24.60	$680	-0.61%

Lowest Price / Earnings Ratio (TTM)

	Company	Symbol	Price	Mkt Cap	P/E
1	Medtronic	MDT	$38.03	$39,574	11.85
2	Zimmer Holdings	ZMH	$61.90	$10,903	12.56
3	Johnson & Johnson	JNJ	$64.34	$176,702	12.82
4	Stryker	SYK	$53.18	$20,258	13.96
5	ArthroCare	ARTC	$24.60	$680	14.06

Highest Price / Earnings Ratio (TTM)

	Company	Symbol	Price	Mkt Cap	P/E
1	Wright Medical	WMGI	$20.91	$822	53.62
2	NuVasive	NUVA	$20.67	$892	48.07
3	Symmetry Medical	SMA	$8.06	$295	32.24
4	Kensey Nash	KNSY	$38.50	$335	26.92
5	Exactech	EXAC	$16.36	$216	23.04

Lowest P/E to Growth Ratio (Earnings Estimates)

	Company	Symbol	Price	Mkt Cap	PEG
1	Orthofix	OFIX	$39.45	$739	0.82
2	Stryker	SYK	$53.18	$20,258	1.30
3	ArthroCare	ARTC	$24.60	$680	1.32
4	Zimmer Holdings	ZMH	$61.90	$10,903	1.35
5	Integra LifeSciences	IART	$35.32	$954	1.43

Highest P/E to Growth Ratio (Earnings Estimates)

	Company	Symbol	Price	Mkt Cap	PEG
1	Wright Medical	WMGI	$20.91	$822	6.36
2	NuVasive	NUVA	$20.67	$892	4.96
3	CryoLife	CRY	$5.08	$140	4.54
4	Symmetry Medical	SMA	$8.06	$295	2.69
5	Johnson & Johnson	JNJ	$64.34	$176,702	2.18

Lowest Price to Sales Ratio (TTM)

	Company	Symbol	Price	Mkt Cap	PSR
1	Symmetry Medical	SMA	$8.06	$295	0.82
2	Alphatec Holdings	ATEC	$1.92	$172	0.87
3	Exactech	EXAC	$16.36	$216	1.05
4	Conmed	CNMD	$27.51	$778	1.07
5	CryoLife	CRY	$5.08	$140	1.17

Highest Price to Sales Ratio (TTM)

	Company	Symbol	Price	Mkt Cap	PSR
1	TiGenix	TIG.BR	$0.66	$60	52.48
2	Mako Surgical	MAKO	$23.20	$988	11.69
3	Synthes	SYST.VX	$169.36	$20,116	5.06
4	TranS1	TSON	$3.53	$96	5.02
5	Kensey Nash	KNSY	$38.50	$335	4.68

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