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Weekly News, Analysis, and Commentary

Power Rankings

Power Rankings: August 15th, 2017

Robin Young's Entirely Subjective Ordering of Public Orthopedic Companies

This Week: The first half of 2017 is essentially in the books. Global hip and knee sales grew between 2-3% with OUS sales weaker than U.S. sales. Spine sales growth, which is highly dependent on Medtronic's report (due out in the couple weeks), was almost non-existent coming in, after Medtronic reports, around 0.5% we expect. The brightest spot remains extremities where sales growth rates were closer to 7-10%. Pricing is tough. As has been the case for a while, procedure growth rates higher than sale growth rates.

Rank Last Week Company TTM Op
Margin
30-Day Change
Comment
1
4
Smith & Nephew
19.53%
2.10%
Venerable London based firm founded by Mr. Smith and his Nephew reported 3% sales growth and a 240 bp jump in operating profit. Add in strategic MIS and robotic moves and SNN moves up to #1 this week.
2
2
Exactech
9.05
(3.77)
Exactech's extremity revenues jumped 19% in the June quarter.  Yet, on a valuation basis, EXAC is the 2nd least expensive equity in ortho.
3
3
ConMed
9.53
(3.52)
Bucking the general ortho trend, CNMD's OUS sales growth rates were higher than U.S. growth rates. EPS came in at roughly double last year's rates.
4
8
Orthofix
8.01
2.71
Orthofix surprised everyone with a 17% increase in spinal implant sales, a 10% increase in biologics sales and a 5% rise in BioStim. Oddly, extremities fell 6%.
5
6
Medtronic
21.05
(4.67)
Medtronic Spine's quarter ends 30 days after all other public spine companies. So numbers should be out in the coming 2-3 weeks. Wall Street is looking for another strong quarter from MDT spine.
6
1
Stryker
22.38
(0.12)
The key to valuation in the orthopedic industry has never been so based on strategic considerations as it is today. Case in point is SYK. That's what fundamentally supports its comparatively higher PE, PSR and PEG.
7
5
Zimmer Biomet
22.92
(11.60)
And the flip side to the valuation case is ZBH. Who will replace former CEO Dvorak? Will it be a strong ortho sales and marketing exec?  Or will the board look outside orthopedics for a strong strategic leader?
8
7
Johnson & Johnson
29.09
0.66
DePuy's large joint recon report for the first half of the year was 4-5%. Synthes trauma sales grew just under 2%. The most disappointing report was Synthes Spine, which fell 8%.
9
9
Integra LifeSciences
11.60
(9.52)
Investors were not impressed with the 2nd quarter report and pulled IART down nearly 10% in the past month. Management's more cautious outlook is a big reason.
10
NR
Globus Medical
26.72
(9.34)
Back on the Power Rankings as GMED's stock price brings it back into blue light special territory. Of course, GMED remains the most profitable orthopedics company of all.

Top Performers Last 30 Days

Company Symbol
Price
Mkt Cap
30-Day Chg
1 Lattice Biologics LBL.V $0.09 $9 20.36%
2 Aurora Spine ASG.V $0.12 $4 15.56%
3 MicroPort Scientific 853 $0.89 $1,280 7.83%
4 Wright Med Grp N.V WMGI $27.80 $2,914 3.23%
5 Xtant Medical Hldgs XTNT $0.71 $13 2.90%
6 Orthofix OFIX $46.95 $853 2.71%
7 Smith & Nephew SNN $35.06 $15,340 2.10%
8 Johnson & Johnson JNJ $133.10 $357,240 0.66%
9 MiMedx Group MDXG $14.96 $1,683 0.07%
10 Stryker SYK $144.18 $53,932 -0.12%

Worst Performers Last 30 Days

Company Symbol
Price
Mkt Cap
30-Day Chg
1 Pacira PCRX $36.40 $1,468 -27.85%
2 RTI Biologics Inc RTIX $4.80 $286 -15.04%
3 NuVasive NUVA $66.63 $3,385 -14.68%
4 SeaSpine Hldgs Corp SPNE $11.81 $148 -11.93%
5 Zimmer Biomet ZBH $111.70 $22,585 -11.60%
6 Integra LifeSciences IART $49.52 $3,866 -9.52%
7 Globus Medical GMED $29.30 $2,821 -9.34%
8 Amedica Corp AMDA $0.35 $13 -7.89%
9 CryoLife CRY $18.40 $615 -7.07%
10 Medtronic MDT $83.71 $113,764 -4.67%

Lowest Price / Earnings Ratio (TTM)

Company Symbol
Price
Mkt Cap
P/E
1 Zimmer Biomet ZBH $111.70 $22,585 19.09
2 Smith & Nephew SNN $35.06 $15,340 19.57
3 Globus Medical GMED $29.30 $2,821 20.33
4 Johnson & Johnson JNJ $133.10 $357,240 20.71
5 Medtronic MDT $83.71 $113,764 23.86

Highest Price / Earnings Ratio (TTM)

Company Symbol
Price
Mkt Cap
P/E
1 MicroPort Scientific 853 $0.89 $1,280 90.53
2 MiMedx Group MDXG $14.96 $1,683 89.58
3 NuVasive NUVA $66.63 $3,385 79.02
4 Orthofix OFIX $46.95 $853 67.25
5 TiGenix TIG.BR $1.03 $268 46.70

Lowest P/E to Growth Ratio (Earnings Estimates)

Company Symbol
Price
Mkt Cap
PEG
1 CryoLife CRY $18.40 $615 1.49
2 Globus Medical GMED $29.30 $2,821 1.93
3 Zimmer Biomet ZBH $111.70 $22,585 2.27
4 Stryker SYK $144.18 $53,932 2.49
5 Exactech EXAC $28.05 $402 2.62

Highest P/E to Growth Ratio (Earnings Estimates)

Company Symbol
Price
Mkt Cap
PEG
1 Orthofix OFIX $46.95 $853 10.11
2 ConMed CNMD $49.29 $1,376 7.05
3 MicroPort Scientific 853 $0.89 $1,280 6.04
4 MiMedx Group MDXG $14.96 $1,683 5.97
5 NuVasive NUVA $66.63 $3,385 5.42

Lowest Price to Sales Ratio (TTM)

Company Symbol
Price
Mkt Cap
PSR
1 Xtant Medical Hldgs XTNT $0.71 $13 0.14
2 Alphatec Holdings ATEC $1.68 $23 0.19
3 Aurora Spine ASG.V $0.12 $4 0.39
4 Amedica Corp AMDA $0.35 $13 0.65
5 RTI Biologics Inc RTIX $4.80 $286 1.05

Highest Price to Sales Ratio (TTM)

Company Symbol
Price
Mkt Cap
PSR
1 Nevro Corp NVRO $81.90 $2,411 10.55
2 TiGenix TIG.BR $1.03 $268 10.01
3 MiMedx Group MDXG $14.96 $1,683 6.87
4 Pacira PCRX $36.40 $1,468 5.31
5 Globus Medical GMED $29.30 $2,821 5.00

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