Has Medtronic's Decline Made It A Buy? By Jonathan Wheeler

Summary

Medtronic is a very diverse mega-cap in the medical device/technology field.

International growth opportunities as well as acquisitions should be able to continue driving improved results for the company.

Although MDT is slightly above its average valuation, the company doesn't go on sale often and is a strong contender for investment.

Medtronic (NYSE:MDT) is a force in the medical technology space, with a market capitalization of over $100B and a massive portfolio of devices across the spectrum of patient needs. The last time I wrote about the company, I passed it over for investment due to overvaluation based on its outlook. However, that was nearly a year ago, and the price is 5% lower than it was then with some earnings growth to hopefully bridge the valuation gap. When comparing MDT to its peers, it isn't necessarily the leader in operating metrics, but it is a strong operator and is trading at a pretty fair price currently.

MDT is well split across its segments, and is most well-known for its Cardiac and Vascular segment. The Diabetes Group represents an excellent long-term opportunity due to the diabetes epidemic in the developed countries that continues to unfold. However, it is still a small part of the company overall. The Minimally Invasive Therapies Group include things like catheters, feeding tubes, ventilators, meshes, etc. Finally, the Restorative Therapies Group includes things like stents, grafts, and drug balloons related mostly to the spine and brain. Additionally, the segment produces neurostimulation systems for pain management, overactive bladder, and other ailments as well as an electrosurgery system utilizing electrical plasma for a variety of applications. This wide diversification shows me that MDT is well established to handle any shifts in technology with its massive size and lack of reliance on any one device type.

Source: https://seekingalpha.com/article/4111466-medtronics-decline-made-buy