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Long Ideas

Tue
12
Nov

It's the Wrong Time to Buy Wright Medical

Wright logo

Stock Tickers

WMGI MDT

Wright Medical (WMGI) investors continue to be unsure about what to do with the stock. Although Wright shares are up more than 28% year to date, the stock has been range-bound since mid-June. While the stagnant share price has frustrated investors, the Street's "wait-and-see" attitude should have come as no surprise.

Not only did the company's management just sell its OrthoRecon business to Chinese med-tech company MicroPort for $290 million in cash, but only a couple of months later, the Food and Drug Administration (FDA) rejected Wright's application for the company's Augment bone graph product, which is used as an alternative in foot and ankle fusion procedures.

Mon
11
Nov

Don't Discount AbbVie

AbbVie logo

Stock Tickers

ABT ABBV PFE JNJ

It has now been three full quarters since health care conglomerate Abbott labs (ABT) separated its drug business into a new entity called AbbVie  (ABBV). Since that split, shares of AbbVie, which have outperformed Abbott, have soared more than 45%.

Now, although the spinoff, which was originally announced in late 2011, was a long-anticipated move, the Street seems surprised that AbbVie has performed so well on its own. Truth be told, I am surprised, too. And with AbbVie's valuation having surpassed large-cap rivals, like Pfizer (PFE), AbbVie's pipeline, which includes blockbuster drug Humira, has suddenly come into question. Not only do I believe these fears are overblown, but I also think -- expensive or not -- investors can still do well in AbbVie stock.

Fri
08
Nov

Striking Value With Stryker

Stock Tickers

SYK JNJ MDT ABT

There was a point when the drama associated with Stryker's (SYK) legal battles and products recalls made me question if the stock was worth the trouble.

In an effort to start fresh, the company is under new leadership. While a new vision can certainly help change the culture of the company, the new regime -- as competent as they may be -- not only must continue to do battle with the likes of Johnson & Johnson (JNJ) and Medtronic (MDT), but also adjust to law changes imposed by the Affordable Care Act (Obamacare) that could impact performance. On top of all of that, the stock was expensive.

Fri
08
Nov

Surgical Gloves Needed for Intuitive Surgical

Intuitive Surgical logo

Stock Tickers

ISRG MDT SYK JNJ

Known for its consistent, rock-solid growth, Intuitive Surgical (ISRG) has been riding the wave of high expectations over the past couple of years as the stock price has climbed from $100 a share in 2009 to $583 this past January. But as is often the case with high-flyers who consistently escape valuation concerns, there's a point when the music stops.

Unlike other strong med-tech giants like Medtronic (MDT) and Stryker (SYK), shares of Intuitive Surgical have always been expensive. It wasn't hard to figure out when the party was over; Intuitive's investors just didn't want to leave. In January, as the stock peaked, Intuitive posted poor growth results and management followed with a warning in July advising that second-quarter results were going to disappoint.

Thu
07
Nov

More Gains Ahead for Bristol-Myers

Bristol-Myers logo

Stock Tickers

BMY JNJ

It's always interesting to see how health care investors live in perpetual fear of the long-term health of their companies. This is regardless of whether the signs of slowing growth have emerged.

While some companies can provoke this terror by under-investing in their product pipelines, which is essentially their lifeblood, others look to offset this fear with extensive cost-cutting measures (if they care to impress the Street).

Even with the recent patent expiration of its drug Plavix, these have never been glowing issues for Bristol-Myers Squibb (BMY), whose stock is up more than 50% year-to-date.

Thu
07
Nov

St. Jude's Been Forgiven, but Don't Forget

St. Jude logo

Stock Tickers

STJ JNJ MDT

Say what you want about Wall Street's "unpredictability," but when investors' minds are made up about a company, there's often little that can change that sentiment. It goes both ways. If you're on the Street's good side -- like St. Jude Medical (STJ) appears to be -- it's a great position to be in. Or is it?

While St. Jude has enjoyed years of solid performances in the medical devices industry against rivals like Johnson & Johnson (JNJ) and Medtronic (MDT), its execution has been anything but flawless. St. Jude's Riata and Durata leads, made to help prevent heart failures, have been failing, thus hurting the company's reputation.

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