Darren SissonsSmith & Nephew PLCSNNCOMMENTOct 07, 2024

It provides orthopedic services, joint repairs, dressings, etc. New management in the last four years turned things around. There is better revenue and profitability as well as lots of brand recognition. It is trading at half the value of its biggest competitors with margins moving up and profitability equivalent to Stryker.             Buy 1  Hold 4  Sell 0

Trades at half the PE as Stryker with slightly less growth. Is a steady eddy, a long-term grower and trading around 15x PE. He still likes it.

(Note the short timeframe.)  Bit of margin improvement plus ~5% industry growth. Almost half the valuation of SYK. Still sees a lot of upside operationally and on stock price.

(Note the short timeframe.)  There's almost a domicile discount because it's a UK company. Big discount to SYK despite being almost as good a business. Chart drops explained by management changes and increased R&D spend, but seems to have recovered from those bumps.

Medical equipment. Not performed great in the last while due to competition. Plus, they took their eyes off the ball. Long-term returns not great, 5-year compound annual performance is -4%. He owns SYK instead -- 5-year performance is 15%.

Hip and knee medical equipment is what they make. Trades at a big discount to Stryker. Benefits from an aging population as well as sports injuries. Has long-term growth. The US is half their market.

Demand continues to grow quite nicely. Competes with SYK (a slightly better business, though at 29x PE), and grows at similar rates. Trades at 13x PE for 10% EPS growth. Likes the risk/reward. Yield is 2.2%.

They make equipment for hip and knee replacements, which is a great place to be. An activist has taken a position here, pushing to break up the company for its underlying value.

Global leader in hip and knee replacement, also wound management. Great secular growth story. Earnings weak last couple of years. Demographic and pickleball play. Lowest valuation in 50 years, 14x PE, 12x next year's PE. Revenues re-accelerating. Earnings and margins growing. Yield is 3.7%.

Cheaper than SYK, and probably more narrowly focused.

He owns Stryker instead. But SNN enjoys a demographic tailwind as Boomers age. Demand will continue to grow.

US Healthcare For knee replacements and implants he likes SNN-N. He does not prefer the ETFs, such as XLV-N, because they hold too broad of an array of companies, including the big drug companies that are under pressure. He would focus on the tool and device space instead.