Medtronic (NYSE: MDT), a manufacturer of a whole host of medical devices involved with the management of diabetes and cardiovascular disease, released its Q1 data on Tuesday. Revenues increased 6%, and adjusted earnings per share came in at 79 cents (some of the adjustments were related to restructuring and litigation issues).
The company was able to grow the adjusted-per-share bottom line by 10%. In addition, according to Reuters, Medtronic beat estimates by a penny. Shareholders should keep in mind, however, that the quarter benefited from an extra week.
Medtronic appears to be doing okay with its various segments. Cash from operations, however, did experience a significant drop. Hopefully cash flow will improve as the year progresses.
I covered Boston Scientific's (NYSE: BSX) second-quarter report last month. Boston Scientific is, of course, in the same business as Medtronic. Comparing the two, I come away with a better fundamental feeling from Medtronic's competitor. Boston Scientific simply seems stronger to me.
Of course, both companies have seen their respective stocks rise this year. That's pretty much been the story with every equity. So I can see Medtronic being a potential trade on a pullback, even though I do prefer looking at Boston Scientific.
For those who would rather study a bigger, more well-known player that has exposure to this space, there's always Johnson & Johnson (NYSE: JNJ). You probably won't get as much of a pop out of that Dow component, it should be noted, but it would be the safer bet, especially as the market gets ready for a possible correction (yeah, I've been saying that for quite a while now, I'll be right one of these days). I expect Medtronic shares to do reasonably well through the end of the year, but if you do decide to buy, have a good exit strategy in place to limit losses.
Disclosure: I don't own any company mentioned; positions can change without notice.
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