Today's post-earnings rally notwithstanding, 2006 has been a pretty miserable year for St. Jude (NYSE:STJ). Shares of this cardiology-focused medical device company have been largely pressured by the slowing market for its primary product -- never a good thing. And though fears of the demise of the market for implantable cardioverter defibrillators (ICDs) are overblown, the same might apply to expectations that things will soon return to normal.

Though St. Jude reported 15% sales growth this quarter, I think that reported figure doesn't quite tell the tale. Since the company did not own Advanced Neuromodulation last year, my calculations show that its organic growth was closer to 9%. What's more, the quality of earnings growth failed to match past performances. Adjusted operating income was essentially flat, and St. Jude's reported adjusted net income growth of 8% resulted from a lower tax rate.

While plenty of companies rely more heavily upon a single product category than St. Jude does, ICDs nevertheless remain the most important single part of its business. Sales here were up about 14% from last year, and the company believes that it once again grabbed a little market share -- most likely from Boston Scientific's (NYSE:BSX) Guidant business, as opposed to Medtronic (NYSE:MDT). Other product categories, such as atrial fibrillation and neuromodulation, posted respectable growth but contributed much less in absolute dollars.

Sussing out the future of St. Jude is not a simple task. I do believe there's a good long-term case to be made for growing ICD demand, but there's a big difference between "good" demand and the crazy growth this market enjoyed in recent years. I'm also a little concerned that St. Jude, like Boston Scientific before the Guidant purchase, could find itself relying on a single product category for a disproportionate amount of growth.

Nonetheless, I think St. Jude is somewhat cheap here. Not really cheap enough to coax me to buy, but cheap enough for me to say that there is still value and potential here. Investors should remember, though, that this is a rough neighborhood -- product liability, FDA bureaucracy, and huge, tough competitors live here, too.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).