Raj Denhoy, Senior Equity Research Analyst at Jefferies & Company, Inc., Interviews with The Wall Street Transcript: Medical Device Companies Look for Growth in International Markets

Wall Street Transcript

67 WALL STREET, New York - August 6, 2013 - The Wall Street Transcript has just published its Medical Devices Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Orthopedics and Cardiovascular Medical Devices - Medical Device Innovation and Consolidation Trends - Cardiac - Health Care - Affordable Care Act - Continued Pricing Pressure - Aging U.S. Population

Companies include: Medtronic, Inc. (MDT), Boston Scientific Corporation (BSX), St. Jude Medical Inc. (STJ), Zimmer Holdings Inc. (ZMH), Stryker Corp. (SYK), Covidien, Ltd. (COV), Edwards Lifesciences Corp. (EW), Insulet Corporation (PODD), ResMed Inc. (RMD) and many more.

In the following excerpt from the Medical Devices Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Where should investors be focusing? Is it on cutting-edge technology?

Mr. Denhoy: It depends on what investors are looking for in this industry. If people are looking for steady growth with certain challenges, but still decent returns and cash flows, I think the industry broadly offers that. If investors have an appetite for faster growth, more risky kind of stories, there are those as well. So you have a lot of choices in some respects.

We tend to focus more so on growthier names, companies that have interesting technologies that they're rolling out or launching, so a company like Edwards Lifesciences (EW), which is still early in the U.S. launch of transcatheter heart valves. They've had some challenges initially in the building of the markets here in the United States. But I don't think it has diminished the longer-term potential at all for this technology, and they've got a multiyear run ahead of them in that regard.

Companies like Insulet (PODD), which makes a little pump for delivery of insulin, they are just on the very early stages of developing a pump that also includes a continuous glucose monitor. It will be several years before it gets here, but the potential for that product is enormous for Insulet. So names like that, I think, are quite interesting to look at.

TWST: How about on some of the bigger names, are any of them really undervalued at this point?

Mr. Denhoy: I have a difficult time saying that. The stocks have had a nice move over the last six months or so, and they are trading at multiples now which are much higher than they've been over the last several years. But again, that's a reflection of the outlook that there are certainly challenges, but there are solutions being mustered to those challenges, and I think they've reached kind of a level of where investors are comfortable with that...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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