Advancing age, obesity and injuries can wear on hips and knees, which is bad news for Baby Boomers, but good news for Stryker.
As one of the biggest makers of implants used to replace and repair damaged hips, knees and other joints, Kalamazoo, MI-based Stryker should strongly benefit from a coming wave of surgeries in the U.S. and elsewhere.
Stryker (ticker: SYK ) has spent billions on acquisitions in the past five years and now generates most of its revenue from products that have nothing to do with hips or knees.
This strategy has paid off. The stock has returned more than 30% in the past 12 months, closing Thursday at $95.83, compared to the 13% gain by the S&P 500.
Though Stryker stock reached an all-time high today, we don’t think investors fully appreciate the underlying value and see ample upside.
Stryker already boasts industry-leading organic sales, which exclude acquisitions, growth. It also has one of the strongest balance sheets in the industry and should continue to capitalize on accretive deal making that drives sales in fast-growing markets and expands its reach outside the U.S.
At a Glance
|Market Value:||$ 36.2 billion|
|Est. 2015 EPS:||$5.20|
|Est. Long-Term EPS Growth:*||8.57%|
|Est. (2014/2013) EPS Growth:||12.30%|
|Revenue (trailing 12 months):||$9.5 billion|
|*Based on analyst estimates looking ahead three to five years.|
|Sources: Thomson Reuters and Yahoo! Finance and www.Strykercorp.com|