Medtronic Inc (MDT)

A healthcare company, but not a pharmaceutical company. They are very big in cardiovascular and diabetes. Growing their top line at roughly 5%-10% per annum, and the bottom line closer to 12%-13% for the foreseeable future for the next 4-5 years. They are in the right place at the right time, and are likely to return about $1 billion a year to the shareholders for the next few years. They are committed to increasing their dividends. Dividend yield of 1.98%.

(Top Pick May 13/16, Down 9%) They gave positive guidance last earnings report. Healthcare stocks are starting to work over the last two to three weeks.

Was a darling in the sector. She views it as a steady eddy right now. It is an acceptable hold if you are diversifying your healthcare holdings. She likes the company as a long term hold of 5 years.

Acquired Covidien about a year or so ago. A very synergistic acquisition. Has had a great run. A name he would absolutely continue to hold onto. Great balance sheet. Growing in their businesses. His preferred choice in medical devices.

(A Top Pick Sept 18/15. Up 22.15%.) Their merger with Covidien has worked out well, and they successfully moved their headquarters to Ireland. There continues to be hefty chunks of cash flow that can be used for tuck in acquisitions or further dividend increases down the road.

He likes healthcare, and specifically medical devices. This company is big on implants, both for heart and minimally invasive, as well spinal implants. With an aging population, a lot of replacement parts are required, and this company is doing a great job. 1.8% dividend yield. He likes the stock.

For 5-10 years? A good name. Basically medical devices. A very, very strong company. Well-managed. Good pipeline of products.

Have been very heavily into pacemakers and are getting very heavily into spinal treatments. Just made an acquisition of a small company that helps out in spinal surgeries. This has been a wonderful performer over time. Free cash flow growth has been in the 13% range over the last 5 years. Dividend has been growing at roughly 9%. A nice steady stock.

He is always very picky when it comes to medical equipment supply companies. This has been one of the major players for very long time, and is one of the better performers. You have the aging and the baby boomers. Some of the healthcare stocks have been beaten and dragged down with the Biotechs. Biotechs started to break out yesterday, which will pull up all health related companies. This has some good fundamentals.

Cardiac implants, spinal implants and diabetes devices. A play on the secular theme of spending on healthcare. They are all about scale. It is fundamentally very attractive. They have a dominant role and can save the system money with their implants.

Medical implants. A play on the aging population. About 1.5 years ago, they took out the old Tyco division called Covidien, their healthcare business. Covidien had got to Ireland, and this company now has done the inversion. This company is now sitting on boatloads of cash globally. We are going to see higher dividends, share buybacks and probably more acquisitions. Target price of $88.

60% of his assets are outside of Canada and he is comfortable with that. He looked at it and decided it was expensive. It is starting to come down.

(A Top Pick July 18/14. Up 14.85%.) Acquired Covidian at about $43 billion, and moved their headquarters to Dublin Ireland for lower taxes. The acquisition transforms them into the largest medical device company globally. It also gives them line of sight to be more significant in emerging markets, as well as general surgical tools. Dividend yield of 2.16%.

This is the one part of the health market that has seen pressure on the pricing side. As hospitals get together and form bigger consortiums, they are able to exert a bit of pressure. When people look at the margins in this area, they feel that maybe they don’t have to be so high. For some of their products, if it is differentiated enough, you could have a little bit of pricing, but there is quite a bit of product of that can be replaced by generics and this is what is happening. She would like to see this start improving and reversing before she got constructive on the name.

This has been doing tremendously well. They do have a lot of debt, and their debt load is a little bit scary for him. If he owned this, he would be thinking of paring back or selling. We are also moving into that time of the year when stocks do not do that well.