For every quarterly estimate that Wall Street set for it last year, medical-equipment maker Medtronic
After the news arrives, we'll have time aplenty to dissect it. But before we begin obsessing over Medtronic's short-term progress, let's review what investors think about it as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 60,000 investors for their views on more than 4,000 companies, Medtronic among them. Here's what Fools have to say about the company.
Up or down?
More than 600 investors have submitted ratings on Medtronic. Their prognosis: This stock is like something the Lord made.
Fully 93% of CAPS investors expect Medtronic to beat the market, and when you drill down to the opinions of our very best investors -- the CAPS All-Stars -- that sentiment swells to a healthy 96%. The stock scores a perfect five our of five possible CAPS stars.
Then again, in the medical-device sphere, optimism is far from rare:
|
Medical Device Group |
|
|---|---|
|
Medtronic |
***** |
|
Johnson & Johnson |
***** |
|
Biomet |
***** |
|
Cytyc |
***** |
|
Hansen Medical |
**** |
|
Intuitive Surgical |
**** |
|
Baxter |
**** |
Wall Street vs. Main Street
If you caught last quarter's installment of this column, you'll have noticed by now that Main Street sentiment has been heavily in favor of Medtronic over the last three months. Wall Street, however, was behind Medtronic from the get-go. Bullish analysts outnumber the bears by a solid 2-to-1 margin.
Bull pitch
Back in May, if an investor liked Medtronic, chances were it was because said investor thought it a buyout target. Today, people are more likely to like the stock based on its products. One fan from CAPS exudes: "The work these folks do is straight out of the sci-fi channel. Cutting edge medical." And the top-rated CAPS bull pitch praises the firm's "[g]ood growth prospects with aging baby boomers and fat little kids that play video games all day."
Bear pitch
There's still precious little bear-baiting going on over on the Medtronic board. We see just the same complaints we saw three months ago -- that Medtronic "needs to expand [its] product line" and that "pending lawsuits will keep MDT tame for a while."
So let's give the bears a hand. From a valuation perspective, I have to say that the stock looks anything but cheap. Analysts predict that the company will grow profits at about 13% per year going forward. But with a 22 trailing price-to-earnings ratio, and a price 25 times last year's free cash flow, I have to wonder whether Medtronic is -- fateful words here -- "priced for perfection."
Who said that?
To learn the identities of the wise Fools who penned these words, to examine their records (and see whether they know whereof they speak), and to explore the plethora of additional financial data we've put together on the company, head right this way.
Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 184 out of more than 60,000 players. Johnson & Johnson is an Income Investor recommendation. Intuitive Surgical is a Rule Breakers selection. The Fool has a disclosure policy.
