Why Covidien plc Shares Soared Today

Is this meaningful? Or just another movement?

Jun 16, 2014 at 4:01PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Covidien plc (NYSE:COV) surged 20% today after medical device giant Medtronic (NYSE:MDT) agreed to acquire its rival for $42.9 billion.

So what: The cash-and-stock deal --$35.19 in cash and 0.956 of a Medtronic share -- values Covidien at $93.22 per share and represents a premium of 29% to its closing price on Friday. Medtronic is making the move to increase its global reach and significantly boost scale but, judging by its own stock's 2% decline today, Mr. Market isn't too thrilled with the price that management is paying to do it.

Now what: The transaction is expected to be accretive to Medtronic's cash earnings and GAAP earnings in FY 2016 and FY 2018, respectively. "This acquisition will allow Medtronic to reach more patients, in more ways and in more places," said Medtronic Chairman and CEO Omar Ishrak. "Our expertise and portfolio of services will allow us to serve our customers more efficiently and better address the demands of the current health care marketplace. We also look forward to welcoming the Covidien team to Medtronic and working together to improve health care outcomes globally." So while Covidien is likely all popped out at this point, Medtronic's newly bolstered top and bottom line growth prospects might be worth looking into. 

Leaked: A huge small-cap opportunity
This smart device –kept secret until now – could mark a new revolution in smart tech (with big implications for health care). It’s a gigantic market opportunity -- ABI Research predicts 485 million of its type will be sold per year. To learn about the small-cap stock making this device possible – the stock that could mint millionaires left and right when its full market potential is realized – click here.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Covidien. The Motley Fool owns shares of Medtronic. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

Something big just happened

I don't know about you, but I always pay attention when one of the best growth investors in the world gives me a stock tip. Motley Fool co-founder David Gardner (whose growth-stock newsletter was rated #1 in the world by The Wall Street Journal)* and his brother, Motley Fool CEO Tom Gardner, just revealed two brand new stock recommendations moments ago. Together, they've tripled the stock market's return over 12+ years. And while timing isn't everything, the history of Tom and David's stock picks shows that it pays to get in early on their ideas.

Click here to be among the first people to hear about David and Tom's newest stock recommendations.

*"Look Who's on Top Now" appeared in The Wall Street Journal which references Hulbert's rankings of the best performing stock picking newsletters over a 5-year period from 2008-2013.

Compare Brokers