Orthopedics This Week | February 16, 2016 | Page 2

ORTHOPEDICS THIS WEEK
VOLUME 12, ISSUE 6 | FEBRUARY 16, 2016

2

Orthopedic Power Rankings

Robin Young’s Entirely Subjective Ordering of Public Orthopedic Companies
THIS WEEK: Orthopedic equities are oversold. Not only due to the current sell off but, as the end of 2015 reports

are demonstrating, orthopedic sales are strong and growing at faster rates, demand for orthopedic products is at
record levels and cash flows are high. Could cheaper ortho equities put a tail wind on M&A activities?
RANK

LAST
WEEK

COMPANY

TTM OP
MARGIN

30-DAY
PRICE CHANGE

1

1

Zimmer
Biomet

31.22%

(9.31%)

2

2

Stryker

22.94

8.98

Buys Synergetics for its neuro business, adds 200
employees to its Flower Mound HQ and buys Sage
for $2.8 billion.

3

3

Exactech

10.26

6.89

Buys Australian distributor and prepares to
announce its 2015 results. Most analysts
expect down sales and earnings.

4

5

Johnson &
Johnson

26.73

4.95

JNJ continues to attract institutional investors who are
afraid but have to make a healthcare purchase.

COMMENT
Zimmer sells stock, then buys it back in a bit of financial
legerdemain. Fundamentals stay strong. ZBH’s sales are
underpriced, especially since each $ earns 31 cents.

5

6

Medtronic

27.92

(1.67)

Medtronic, which has a non-calendar fiscal year, is
about to report its 3rd quarter of FY 2016. Analysts
expecting 2% sales growth.

6

7

Smith &
Nephew

19.66

(4.97)

AAOS is nearly here (March 1) and SNN should have
a strong presence. One interesting focus is its sports
medicine franchise.

7

4

Integra
LifeSciences

13.74

(11.44)

While most analysts are expecting IART to report a
slightly down year for 2015, they are signaling sharp
growth in 2016.

8

8

Globus
Medical

30.19

(10.77)

GMED’s P/E is now only 17x, the PSR is comparatively
high at 4.54