"Stryker (NYSE: SYK) is a bargain at 15.1x next 12-month EPS," says J. Royden Ward, editor of The Cabot Benjamin Graham Value Letter, a service which focuses on stocks that would be well-suited to the investing strategy of Ben Graham, legendary value investor and mentor to Warren Buffett.
"Stryker develops, manufactures and sells specialty surgical and medical products. Its orthopedic division makes hip, knee and other implants.
"SYK also makes a wide variety of medical products and instruments ranging from hospital beds to medical video cameras, surgical drills and saws, and instruments for implants.
"Stryker is in an industry with above average growth that is somewhat immune to economic recessions. The company's leading research department has provided a steady stream of innovative products during the past several decades.
"We expect 16% EPS growth during the next several years led by new orthopedic implant products. The company's balance sheet is very strong, with no debt and lots of cash.
"How cheap is it? A steady stream of new health care products for an aging population coupled with well managed cost controls will push SYK's share price substantially higher in 2009.
"The stock is a bargain at 15.1 times next 12-month EPS, although the dividend yield is low at 1.0%. We expect SYK shares to advance to our 'Minimum Sell Price' of 95.46 within two to three years."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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