Opinions
David Burrows
Medtronic Inc
MDT-N
COMMENT
Oct 17, 2016
Stock price when the opinion was issued
You might be interested:
MDT is a mature MedTech company that is now trading at a 15.9x Forward P/E. Over the last few years, MDT’s valuation has ranged from 13.4x to 22.8x Forward P/E, we think the current valuation is fairly attractive. MDT’s share price has performed well recently due to a combination of 1) investors moving to defensive sectors with stable cash flows 2) MDT reported very solid earnings with a 5.3% organic growth rate.
Unlock Premium - Try 5i Free
MDT is a mature MedTech company that is now trading at a 15.9x Forward P/E. Over the last few years, MDT’s valuation has ranged from 13.4x to 22.8x Forward P/E, we think the current valuation is fairly attractive. MDT’s share price has performed well recently due to a combination of 1) investors moving to defensive sectors with stable cash flows 2) MDT reported very solid earnings with a 5.3% organic growth rate.
Unlock Premium - Try 5i Free
He likes healthcare “devices”, because it is the area that is least likely to be attacked by a government. They are somewhat less regulated from a price standpoint. This company has very strong market share in rhythm devices. Earnings for the year should be up about 7% over last year, but should accelerate up to about 11% next year. It has consolidated between $80 and $90 going back to June. Sitting at around the 150 day moving average, so technically is in a good spot. You should see earnings accelerate going forward, which is what he cares about.