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Top Med-Tech Stock Picks for 2012 (BSX, ISRG, STJ)

Administrator — Wed, 21 Dec 2011 22:06:15 +0000

Many research firms have been coming up with their best ideas lists for 2012. Today brought a list of top picks in the medical technology and medical devices sector from Zacks Investment Research. We have decided to focus on three picks with some commentary and observations of our own along with the consensus upside from Thomson Reuters rather than just the full Zacks list: Boston Scientific Corporation (NYSE: BSX); Intuitive Surgical, Inc. (NASDAQ: ISRG); and St. Jude Medical, Inc. (NYSE: STJ). There is also a link on each for you to get the full report on each from Zacks.

Boston Scientific Corporation (NYSE: BSX) is a bit of a surprise to see as a top pick considering that this company’s stock is not just under $10.00 now… It is barely a $5.00 stock. The drug-eluting stent share and a recent approval are driving the decision. The consensus analyst price target from Thomson Reuters is roughly $7.00, implying about 35% upside from here. FULL BOSTON SCIENTIFIC REPORT

Intuitive Surgical, Inc. (NASDAQ: ISRG) is not so interesting as a top pick because of any sort of controversy, but it is interesting as a top pick considering that it is up more than 50% in 2011. At $440.73 and with a high of $449.06, this stock is trading right at the consensus analyst target price from Thomson Reuters of $440.10. FULL INTUITIVE REPORT

St. Jude Medical, Inc. (NYSE: STJ) may seem like a bottom-fishing pick as shares are down about 40% from the annual highs. At $33.67, the Thomson Reuters consensus price target has an implied 32% of upside to the $44.38 price target. Zacks called it better placed against other medical devices stocks in the cardiovascular sector, with positive earnings surprises and healthy revenue growth. FULL ST. JUDE REPORT

Others on the top picks list for 2012 by Zacks are Medtronic, Inc. (NYSE: MDT), Stryker Corporation (NYSE: SYK), Thermo Fisher Scientific, Inc. (NYSE: TMO), and ZOLL Medical Corporation (NASDAQ: ZOLL).

JON C. OGG

Filed under: Analyst Calls, Medical, Value Investing Tagged: BSX, ISRG, MDT, STJ, SYK, TMO, ZOLL

Top Analyst Upgrades & Downgrades (ARMH, CFN, COP, EIX, GIS, GS, PDLI, SAP, SFD, S, SYK, TEF, TI, TSN, VLO)

Administrator — Tue, 11 Oct 2011 12:14:04 +0000

These are some of this Tuesday’s top analyst upgrades, downgrades, and initiations seen having an impact from Wall Street research calls.

ARM Holdings plc (NASDAQ: ARMH) Raised to Buy at Citigroup.
CareFusion Corporation (NYSE: CFN) Raised to Buy at BofA/ML.
ConocoPhillips (NYSE: COP) Cut to Underperform at Macquarie.
Edison International (NYSE: EIX) Added to US Focus List at Credit Suisse.
General Mills, Inc. (NYSE: GIS) Added to Conviction Buy List at Goldman Sachs.
Goldman Sachs Group Inc. (NYSE: GS) estimates cut to expect a loss by Citigroup.
PDL BioPharma, Inc. (NASDAQ: PDLI) Cut to Sector Perform at RBC.
SAP AG (NYSE: SAP) Started as Buy at Citigroup.
Smithfield Foods Inc. (NYSE: SFD) Raised to Buy at BofA/ML.
Sprint Nextel Corporation (NYSE: S) Cut to Hold at Argus; Removed from U.S. Focus List at Credit Suisse.
Stryker Corporation (NYSE: SYK) Raised to Buy at BofA/ML.
Telefonica, S.A. (NYSE: TEF) Cut to Neutral at Goldman Sachs.
Telecom Italia SpA (NYSE: TI) Cut to Sell at Goldman Sachs.
Tyson Foods Inc. (NYSE: TSN) Raised to Buy at BofA/ML.
Valero Energy Corporation (NYSE: VLO) Raised to Overweight at Barclays.

JON C. OGG

Filed under: Analyst Calls Tagged: ARMH, CFN, COP, EIX, GIS, GS, PDLI, S, SAP, SFD, SYK, TEF, TI, TSN, VLO

Smith & Nephew Becomes Worth an Arm and a Leg in M&A (SNN, JNJ, ZMH, SYK, MDT)

Administrator — Mon, 10 Jan 2011 15:34:45 +0000

Smith & Nephew plc (NYSE: SNN) is trading higher today on reports that it rebuffed an approach for a takeover by Johnson & Johnson (NYSE: JNJ). What is interesting about the implied $10.9 billion, or 750 pence per share in London, was called too low.

If you have been around in the investing world of medical devices for long, Smith & Nephew has has been discussed for some time as a possible buyout target. S&N is a company in orthopedics, endoscopy, and wound management; but it is perhaps best known for its hip, knee, and shoulder joint replacement systems.

This seems a natural fit into the DePuy unit at J&J. At issue is that J&J has recall problems in many aspects of its business, including its hip replacement system. Some have felt that Zimmer Holdings, Inc. (NYSE: ZMH) and Stryker Corp. (NYSE: SYK) could be acquirers to enhance their joint replacement offerings. The problem with Zimmer is that it would be closer to a merger of equals. Stryker is worth more than twice S&N by market cap. Medtronic, Inc. (NYSE: MDT) is another name that could be considered a possible player if it were to choose to. With a $39 billion market cap it has the chips to play if it wishes.

The Daily Mail reported over a month ago that private equity firms were considering a bid higher than J&J’s 750 pence bid up around 800 pence. Nothing has come to fruition there and many, including us, wonder if a private equity consortium might do better looking elsewhere to spend more than $10 billion in a club deal. Club deals have fallen by the wayside since the private equity bubble burst, as have deals greater than $10 billion in size. Biomet was taken private back in 2007 by a private equity consortium for about $11.4 billion. At issue is this: compare the world of 2007 to the world of 2011, even for billionaires wanting to buy companies.

It seems now that the question is not whether S&N would make an attractive target. The question seems to boil down to price. Nearing $11 billion is getting up there for the upper limits of new deals for private companies and public companies alike. S&N’s management maintains that it is undervaluing the company. S&N’s ADRs are up almost 11% at $56.39 on Monday and its year high is now $56.80 from this morning. This one traded above $60 in ADR terms back in 2007 and 2008 before the market went south.

They say that ‘Beauty is in the Eye of the Beholder.’ It just depends upon how much the beholder sees as the crossing-point where value becomes fully-priced.

JON C. OGG

Filed under: ADR, Medical, Mergers and Buy Outs, Private Equity, Rumors Tagged: JNJ, MDT, SNN, SYK, ZMH

December Buybacks Near $30 Billion Already, More For 2011 (T, AET, AZO, ADSK, CB, CAG, CCK, ECA, ENZN, HD, INTC, MAN, MKL, SWY, SYK, TEVA, TIBX, PKW, CSCO, GE, BAC, WFC, JPM)

Administrator — Wed, 22 Dec 2010 17:38:33 +0000

There is a long-standing debate over the effect and impact of share buyback plans. What is not up for debate is that many companies have given big updates or announced new buyback plans in the month of December. In less than two weeks we had some $15 billion in updated buybacks, but through December 22 we actually have a much larger number: almost $29 billion tracked in just these buybacks! The number is likely over $30 billion already.

We have updates for AT&T Inc. (NYSE: T), Aetna Inc. (NYSE: AET), AutoZone Inc. (NYSE: AZO), Autodesk, Inc. (NASDAQ: ADSK), Baxter International Inc. (NYSE: BAX), Chubb Corporation (NYSE: CB), ConAgra Foods, Inc. (NYSE: CAG), Encana Corp. (NYSE: ECA), Enzon Pharmaceuticals Inc. (NASDAQ: ENZN), Franklin Resources Inc. (NYSE: BEN), The Home Depot, Inc. (NYSE: HD), Intel Corporation (NASDAQ: INTC), Markel Corp. (NYSE: MKL), Safeway Inc. (NYSE: SWY), Stryker Corp. (NYSE: SYK) and Teva Pharmaceutical Industries Limited (NASDAQ: TEVA), TIBCO Software Inc. (NASDAQ: TIBX), and Trinity Industries Inc. (NYSE: TRN).

The buyback ETF is PowerShares Buyback Achiever Portfolio (NYSE: PKW), and we have highlighted that herein as well. We also took a look at the continuing situations in General Electric Co. (NYSE: GE) and Cisco Systems Inc. (NASDAQ: CSCO). For buybacks in 2011, there is already evidence that Bank of America Corp. (NYSE: BAC), Wells Fargo & Co. (NYSE: WFC), and J.P. Morgan Chase & Co. (NYSE: JPM) could begin significant buyback programs.

There is a long-standing debate over whether or not stock buybacks are an effective return of cash to shareholders. It’s a simple theory by lowering the number of outstanding shares to boosts the price of the stock. That does not always work, but many companies are willing to spend billions upon billions for this effort. Investors need to know that many new buyback plans are coming. We wanted to track December’s big buybacks now that we are likely over some $30 billion if you include the many smaller buybacks we either missed or eliminated due to size and the length of this already.

AT&T Inc. (NYSE: T) announced last week that it plans to repurchase as many as 300 million shares. This would represent some $8.7 billion worth of stock at the time, or about 5% of its shares. The current market cap is close to $171 billion.

Aetna Inc. (NYSE: AET) approved the repurchase of $750 million of stock, which is actually in addition to roughly $257 million left in prior approvals. We’ll call it $1 billion for short, and that compares to a market cap of just over $12 billion at the time.

AutoZone Inc. (NYSE: AZO) added some $500 million into its buyback plan. The company noted, “Since the inception of the repurchase program in 1998, and including the above amount, AutoZone’s Board of Directors has authorized $9.9 billion.” Its market cap is currently just shy of $12 billion.

Filed under: Analyst Calls, Banking, Corporate Governance, Dividend, Economy, Editor's Picks, Large Cap Stocks, Mergers and Buy Outs, Shareholder Issues, Stock Buybacks, Trading Alert, Value Investing Tagged: ADSK, AET, AZO, BAC, CAG, CB, CCK, CSCO, ECA, ENZN, GE, HD, INTC, JPM, MAN, MKL, PKW, SWY, SYK, T, TEVA, TIBX, WFC

December Buybacks Over $15 Billion, More For 2011 (AET, CB, CAG, ECA, HD, INTC, MKL, SWY, SYK, TEVA, CSCO, BAC, WFC, JPM)

Administrator — Fri, 10 Dec 2010 12:55:00 +0000

There have always been questions about whether stock buybacks are an effective return of cash to shareholders. The theory is a simple one: reducing the number of shares outstanding boosts the price of the stock. It does not always work out that way. Still, some companies are willing to spend billions of dollars on themselves and many new buyback plans are coming. We wanted to track the big buybacks so far which have just been announced or updated since the start of December. While not all the programs are new, the total came to a sum of more than $15 billion. That $15+ billion does not even count many of the smaller or less obvious buyback updates.

The companies which we have updates on are Aetna Inc. (NYSE: AET), Chubb Corporation (NYSE: CB), ConAgra Foods, Inc. (NYSE: CAG), Encana Corp. (NYSE: ECA), The Home Depot, Inc. (NYSE: HD), Intel Corporation (NASDAQ: INTC), Markel Corp. (NYSE: MKL), Safeway Inc. (NYSE: SWY), Stryker Corp. (NYSE: SYK) and Teva Pharmaceutical Industries Limited (NASDAQ: TEVA).

We also took a look at the ongoing example of Cisco Systems Inc. (NASDAQ: CSCO). For buybacks in 2011, there is already evidence that Bank of America Corp. (NYSE: BAC), Wells Fargo & Co. (NYSE: WFC), and J.P. Morgan Chase & Co. (NYSE: JPM) could begin significant buyback programs.

We have two insurance buyback announcements. Aetna Inc. (NYSE: AET) approved the repurchase of $750 million of stock, which is actually in addition to roughly $257 million left in prior approvals. We’ll call it $1 billion for short, and that compares to a market cap of just over $12 billion. Chubb Corporation (NYSE: CB) has now authorized an additional 30 million shares for buybacks, and that appears to be the second buyback expansion in the year. That is nearly $1.8 billion at current share prices against a market cap of nearly $18 billion.

ConAgra Foods, Inc. (NYSE: CAG) lowered its guidance for growth in 2011, but it did expand its buyback ambitions by the $554 million received as an early repayment of notes it was owed. ConAgra’s plan is now close to $750 million against a market cap of $9.7 billion.

Encana Corp. (NYSE: ECA) announced that it received renewed approval for a Normal Course Issuer Bid from the Toronto Stock Exchange and it may repurchase and cancel up to 36.8 million shares. That is roughly 5% of its outstanding and issued shares. Its market cap is close to $21 billion.

The Home Depot, Inc. (NYSE: HD) is targeting some $2.5 billion in share buybacks ahead in 2011 versus a market cap of roughly $56 billion.

Intel Corporation (NASDAQ: INTC) CEO Paul Otellini announced that the company has recently begun repurchasing shares of its common stock after having suspended buybacks for some time. Intel had roughly $5.7 billion remaining under an existing $25 billion buyback plan. Intel’s market cap is more than $120 billion.

Filed under: Stock Buybacks Tagged: AET, BAC, CAG, CB, CSCO, ECA, HD, INTC, JPM, MKL, SWY, SYK, TEVA, WFC

Top Analyst Upgrades and Downgrades (MT, BLK, BCSI, HAS, LOGI, NBG, NTRI, CRM, SAPE, SON, SYK)

Administrator — Tue, 04 May 2010 12:12:57 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this morning:

ArcelorMittal (NYSE: MT) Raised to Buy at ING.
BlackRock, Inc. (NYSE: BLK) Started as Buy at Stern Agee.
Blue Coat Systems Inc. (NASDAQ: BCSI) Started as Outperform at Wells Fargo.
Hasbro Inc. (NYSE: HAS) Started as Conviction Buy at Goldman Sachs.
Logitech International SA (NASDAQ: LOGI) Raised to Hold at RBS.
National Bank of Greece SA (NYSE: NBG) Cut to Market Perform at KBW.
NutriSystem Inc. (NASDAQ: NTRI) Raised to Buy at Lazard.
Salesforce.com (NYSE: CRM) Raised to Buy at Goldman Sachs.
Sapient Corp. (NASDAQ: SAPE) Raised to Conviction Buy List at Goldman Sachs.
Sonoco Products Co. (NYSE: SON) Started as Outperform at Oppenheimer.
Stryker Corporation (NYSE: SYK) Raised to Outperform at Bernstein.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Filed under: Analyst Calls Tagged: BCSI, BLK, CRM, HAS, LOGI, MT, NBG, NTRI, SAPE, SON, SYK

Top Analyst Downgrades (KSU, NRP, NOK, SYK, TOL)

247wallst — Mon, 24 Aug 2009 11:53:46 +0000

These are this morning’s top research downgrades and cautious calls from Wall Street analysts this Monday morning with close to two hours until the market opens:

Kansas City Southern (KSU) Cut to Neutral at UBS.
Natural Resource Partners (NRP) Cut to Sell at Citigroup.
Nokia (NOK) Cut to Hold at Deutsche bank.
Stryker (SYK) Cut to Market Weight at Thomas Weisel.
Toll Brothers (TOL) Cut to Hold at Citigroup.

JON C. OGG

Posted in Analyst Calls Tagged: KSU, NOK, NRP, SYK, TOL

Top Pre-Market Analyst Downgrades (ADTN, AFL, CBS, DDUP, ENR, INWK, PCS, PTRY, RGLD, SYK)

247wallst — Tue, 27 Jan 2009 07:17:21 +0000

These are some of this Tuesday’s top pre-market analyst downgrades and cautious research calls from Wall Street that we have seen with more than two hours until the opens:

ADTRAN (ADTN) Started as Equal-Weight at Barclays.
AFLAC (AFL) Cut to Hold at Deutsche Bank.
CBS (CBS) Cut to Underperform at Bernstein.
Data Domain (DDUP) Started as Sell at Broadpoint AmTech.
Energizer (ENR) Cut to Sell at UBS.
Innerworkings (INWK) Cut to Hold at Jefferies.
MetroPCS (PCS) Cut to Sector Perform ar RBC.
Pantry (PTRY) Cut to Market Perform at FBR.
Royal Gold (RGLD) Cut to Underweight at HSBC.
Stryker (SYK) Cut to Hold at Needham.

Jon C. Ogg
January 27, 2009

Posted in Analyst Calls Tagged: ADTN, AFL, CBS, DDUP, ENR, INWK, PCS, PTRY, RGLD, SYK

This Week’s Key Stock Buybacks & Repurchases (SYK, NILE, TDC, WW, CPWR, CE, EFX, VARI)

247wallst — Fri, 15 Feb 2008 13:15:56 +0000

While earnings season is slowly winding down and while the economy is obviously cooling, we still have many large and small companies alike with solid balance sheets or that have extra cash to deploy on hand. These are some of the key share buybacks we have seen this week.

Stryker (NYSE: SYK) announced a general $750 million for share buybacks for general corporate purposes and to offset dilution from options. This is one of the larger buyback plans announced, but it is small in comparison to its market cap of $27.93 billion.

Blue Nile (NASDAQ: NILE) approved a $100 million share buyback. With its poor guidance, buybacks may only partially help a growing problem. The current market cap sits at about $688.11 million.

Teradata (NYSE: TDC) announced a $250 million stock buyback plan. With positive 2008 guidance, future earnings per share should grow. The current market cap is $4.27 billion.

Watson Wyatt (NYSE: WW) announced a $100 million stock buyback plan. The company noted that the buybacks will help offset dilution from employee benefit plans. Its current market cap is $2.21 billion

Compuware (NASDAQ: CPWR) announced a $750 million buyback plan to reduce the balance of outstanding common shares to 200 million. They currently have 281.4 million shares outstanding. The current market cap is $2.27 billion.

Celanese (NYSE: CE) Board approved a $400 million share buyback. The CEO noted that the buyback demonstrates their commitment to delivering value to shareholders while retaining financial flexibility. The current market cap is $6.04 billion.

Equifax (NYSE: EFX) announced a $250 million share buyback approval. It is yet another in a series of buybacks valued at about $1.08 billion since 2004. The current market cap is $4.53 billion.

Varian (NYSE: VARI) Board approved a $100 million share repurchase program. The buybacks could boost an already healthy stock. The current market cap is $6.53 billion.

Rachel Lopez
February 15, 2008

Largest Van der Moolen Specialist Stocks II (VDM, LAB, HUM, MBI, IP, MT, PFE, PHM, SAP, HOT, SYK, TXT, UA, WEN)

247wallst — Thu, 15 Nov 2007 09:47:52 +0000

We have already noted the Van der Moolen (NYSE:VDM) exit of all NYSE Specialist activities and we’ve already covered some of the other key stocks where Van der Moolen acts as a Specialist in the underlying stocks. What we wanted to look at is the underling stocks companies where Van der Moolen acts as a specialist to the companies. The huge list can be found at http://www.vdm-usa.com/clients/alpha.asp off their web site.

Please be advised that these may have changed because we’ve already seen two merger stocks on the full list that are no longer traded. This was taken from Van der Moolen’s site, so any errors there probably means they already laid off the I.T. editor for its web site.

Here are some of the key names for a second list: Humana Inc. (HUM), International Paper Co. (IP), MBIA Inc. (MBI), Mittal Steel Co. (MT), Pfizer Inc. (PFE), Pulte Homes Inc. (PHM), SAP A.G. (SAP), Starwood Hotels & Resorts Worldwide Inc. (HOT), Stryker Corp. (SYK), Textron Inc. (TXT), Under Armour, Inc. (UA), Wendy’s International Inc. (WEN)…. Also listed is LaBranche & Co. Inc. (LAB), which is a bit ironic seeing as that this is another specialist firm.

Jon C. Ogg
November 15, 2007

Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.