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Weekly News, Analysis, and Commentary

Power Rankings

Power Rankings: March 20th, 2017

Robin Young's Entirely Subjective Ordering of Public Orthopedic Companies

This Week: Average orthopedic P/E is 22x versus the S&P's 16x. It's high. Orthopedic earnings have to grow to meet these valuation expectations. Tax reform, infrastructure spending, deregulation might, might help get there. But Trump is pushing healthcare reform instead. Early indications are that millions will lose insurance. That would be bad for orthopedics. And a gut punch to these valuations.

Rank Last Week Company TTM Op
Margin
30-Day Change
Comment
1
2
Zimmer Biomet
23.86%
3.72%
Zimmer's Signature Solutions was received very well at AAOS. Patient engagement. Data mining. Predictive analytics. Expert consulting. It's a major trend and ZBH is all in.
2
1
Medtronic
 20.54
5.83
MDT reported its strongest spine sales growth in seven years for the 3rd quarter. Not much from MDT at AAOS, but the real action will be at NASS.
3
8
Exactech
9.20
6.60
Sellers have been in charge of this stock. Then AAOS happened. Now buyers are back and the stock is up nearly 7% in the last 30 days.
4
3
Stryker
22.69
5.49
Rock 'em sock 'em robots. Stryker is leading the charge, for sure. Globus is a fast follower. ZBH's ROSA will be out in 18 months. They're here to stay. Albeit modest penetration.
5
9
Orthofix
9.02
3.87
Excellent free cash flow, rebuilt infrastructure and strong core biostim and extremity businesses—2017 and 2018 should be years when OFIX steps up strategically.
6
4
Globus Medical
29.72
6.71
Two key lessons about GMED. Strong cash flows, of course. But the speed with which it has developed and launched its surgical robot reminds that GMED is also very fast.
7
5
RTI Surgical
-0.93
11.59
RTI is all about the new management team. What's their vision? Where do they want to take this allograft and instrument company? So far, investors are buying.
8
6
Smith & Nephew
18.40
1.99
Smith & Nephew, which purchased Blue Belt surgical robots, was clearly out shined with all the MAKO hype at AAOS. In fact, former CEO at Blue Belt, Eric Timko, is now at OrthoAlign.
9
7
Integra Lifesciences
15.21
(2.19)
Once the Codman closes and both Derma Sciences and Codman are fully integrated, then the new Integra emerges.
10
10
Johnson & Johnson
27.98
9.99
One of my best meetings at AAOS was with Juan Jose Gonzales and Ciro Romer, President and Group President for DePuy Synthes, respectively. Extraordinary leadership. Remarkable vision.

Top Performers Last 30 Days

Company Symbol
Price
Mkt Cap
30-Day Chg
1 Xtant Medical Hldgs XTNT $0.64 $11 44.89%
2 RTI Biologics Inc RTIX $3.85 $225 11.59%
3 Johnson & Johnson JNJ $128.06 $347,157 9.99%
4 Wright Med Grp N.V WMGI $29.30 $3,036 8.84%
5 TiGenix TIG.BR $0.79 $206 7.96%
6 Amedica Corp AMDA $0.44 $16 7.85%
7 Pacira PCRX $47.40 $1,779 7.36%
8 Globus Medical GMED $29.12 $2,793 6.71%
9 MiMedx Group MDXG $8.85 $963 6.63%
10 SeaSpine Hldgs Corp SPNE $7.25 $84 6.62%

Worst Performers Last 30 Days

Company Symbol
Price
Mkt Cap
30-Day Chg
1 CryoLife CRY $16.90 $557 -13.55%
2 K2M Grp Hldgs KTWO $19.37 $823 -6.02%
3 Lattice Biologics LBL.V $0.18 $13 -5.85%
4 Integra LifeSciences IART $43.32 $3,241 -2.19%
5 Conmed CNMD $42.94 $1,195 -0.27%
6 MicroPort Scientific 853 $0.74 $1,072 -0.18%
7 Nevro Corp NVRO $94.02 $2,744 -0.03%
8 Aurora Spine ASG $0.14 $4 0.88%
9 NuVasive NUVA $75.36 $3,813 1.18%
10 Smith & Nephew SNN $31.23 $13,662 1.99%

Lowest Price / Earnings Ratio (TTM)

Company Symbol
Price
Mkt Cap
P/E
1 Smith & Nephew SNN $31.23 $13,662 17.43
2 Globus Medical GMED $29.12 $2,793 20.11
3 Johnson & Johnson JNJ $128.06 $347,157 20.67
4 Medtronic MDT $82.23 $112,563 23.67
5 Stryker SYK $132.66 $49,466 24.61

Highest Price / Earnings Ratio (TTM)

Company Symbol
Price
Mkt Cap
P/E
1 NuVasive NUVA $75.36 $3,813 94.98
2 MiMedx Group MDXG $8.85 $963 77.09
3 Orthofix OFIX $39.50 $709 56.27
4 CryoLife CRY $16.90 $557 43.70
5 Integra LifeSciences IART $43.32 $3,241 34.12

Lowest P/E to Growth Ratio (Earnings Estimates)

Company Symbol
Price
Mkt Cap
PEG
1 CryoLife CRY $16.90 $557 1.46
2 Globus Medical GMED $29.12 $2,793 1.77
3 Exactech EXAC $26.65 $381 2.52
4 Stryker SYK $132.66 $49,466 2.53
5 Zimmer Biomet ZBH $121.67 $24,468 2.94

Highest P/E to Growth Ratio (Earnings Estimates)

Company Symbol
Price
Mkt Cap
PEG
1 Orthofix OFIX $39.50 $709 8.79
2 NuVasive NUVA $75.36 $3,813 6.32
3 Conmed CNMD $42.94 $1,195 5.19
4 MiMedx Group MDXG $8.85 $963 5.14
5 Johnson & Johnson JNJ $128.06 $347,157 3.50

Lowest Price to Sales Ratio (TTM)

Company Symbol
Price
Mkt Cap
PSR
1 Xtant Medical Hldgs XTNT $0.64 $11 0.12
2 Alphatec Holdings ATEC $3.17 $28 0.23
3 Aurora Spine ASG $0.14 $4 0.62
4 SeaSpine Hldgs Corp SPNE $7.25 $84 0.65
5 Amedica Corp AMDA $0.44 $16 0.82

Highest Price to Sales Ratio (TTM)

Company Symbol
Price
Mkt Cap
PSR
1 TiGenix TIG.BR $0.79 $206 92.16
2 Nevro Corp NVRO $94.02 $2,744 12.01
3 Pacira PCRX $47.40 $1,779 6.44
4 Globus Medical GMED $29.12 $2,793 4.95
5 Johnson & Johnson JNJ $128.06 $347,157 4.83

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