Paul MacDonaldStryker Corp.SYKTOP PICKMay 09, 2023

Medical devices are an important area that keeps people out of expensive hospitals, improves quality of life, and reduces reliance on drugs. Great advances, which will grow over the years. You want to be in this area. He owns SYK and JNJ in the space.

Medical devices. Joint replacements. Huge backlog due to Covid. Costs increased from supply chains and labour, but now sorted out. Really improves quality of life. Great business, lots of growth from aging demographics. Lots of growth internationally, too. Once a doctor "buys in", tremendous brand loyalty. Yield is 1%.

It is in the medical devices field producing parts for artificial knees, hips, etc. and improving patient quality of life. Surgeons tend to stick with the same products so there is a stability to its income. The backlog from Covid is being decreased but there is room to grow internationally and an aging population needs more of these surgeries. 72% of its business comes from the U.S. and the rest from emerging markets and the developed world. They have lots of free cash flow to buy other companies.       Buy 18  Hold 11  Sell 1

Doing well given the backlog in surgeries. 73% of their business is in the US, but there's growth in emerging markets where they also operate. Doctors stick with their products and seldom change. Also, aging demographics help. They could make acquisitions, which will benefit them.

SYK has performed well this year, increasing as much as 24% year-to-date and as high as 48% (before the recent sell-off) on a one-year basis. Its valuation reached its historical high point of ~5.5X forward sales and ~28X forward earnings. Its fundamentals are strong and it continues to expand on most metrics, but we feel that its valuation became too stretched and we're beginning to see its price decline alongside the broader US healthcare market. We would be comfortable continuing to hold this name as part of a long-term healthcare position. 
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Stryker makes replacement body parts with several components involved. There is a huge backlog of elective surgeries due to Covid. Also an aging population needs more of these artificial parts so there is lots of growth ahead. Surgeons tend to use the same parts rather than switching to other makes. It has a great balance sheet and may make more acquisitions to grow the business. There may be some cost issues to deal with but this shouldn't be a problem. 70% of its business comes from the U.S.             Buy 17  Hold 12  Sell 1

Great business with aging population.
Bullish on healthcare sector.
Good time to buy for long term investor.
Strong fundamentals. 

They just reported a good quarter. They have solid growth; there will be more surgeries through the backlog.

Beneficiaries of increase in procedures since Covid. Replacement parts plus equipment. Never a cheap stock, but going into a growth period. Wouldn't hesitate to recommend it as part of a portfolio. Quality, well managed.

The caller was wondering whether to sell Johnson and Johnson and buy Stryker. Both are good companies and good for recessionary times. Johnson and Johnson is a consumer staple which sometimes has trouble with margins. He owns Stryker, a well run company.

Covid-induced backlog of surgeries is being tackled, and this benefits SYK, as it supplies both equipment and replacement joints. Innovative. 

Things are back to normal. Best way to play the aging population. Market leader with best products and relationships with surgeons. Lots of potential globally. Sees tremendous growth ahead. Yield is 1.02%.

He just bought it. Though healthcare is down 3% YTD, he likes the medical devices space. Medical procedures are coming back. He likes the orthopedic and spine segment of their business, a strong catalyst. Also, supply chains have eased to expand their margins, plus the stock has momentum. Up 20% YTD with more upside ahead.

They reported top and bottom line growth and organic growth was better than expected. He's bullish about medical devices, given the Covid-induced backlog in surgeries.