This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Boston Scientific's Gains Can't Last

Stocks in this article: BSX MDT JNJ SYK STJ ABT

NEW YORK (TheStreet) -- After posting gains of more than 105% year-to-date, not only has the Street woken up to what Boston Scientific (BSX) has become, but investors are beginning to place strong bets on what management will do in 2014. At the risk of sounding too pessimistic, we've been down this road before. And it's only led to a dead end.

While there are meaningful signs that management, in particular new CEO Mike Mahoney, has moved Boston Scientific past some of its problems, I can't ignore that this company has spent the past decade lingering in perpetual restructuring mode, leaving investors in limbo of what direction management will take next. Billions of dollars spent on acquisitions have produced little-to-no growth.

I will grant that the company is in a much better position today than it was prior to Mahoney's arrival. But I have to question if the stock's strong year-to-date performance is a true reflection of investors' confidence. I don't believe that Boston Scientific has done enough over the past three quarters to suggest that it can outperform in the next 12 to 18 months, which is what these share gains presume.

Although third-quarter results were moderately better than the company's prior quarters, they were still no better than in-line performance. I'm inclined to believe Boston Scientific's recent stock gains have been the result of a wave of better-than-expected earnings seen from other med-tech giants like Medtronic (MDT), St. Jude Medical (STJ) and Stryker (SYK).

I expect investors will disagree. But given the deficits this company has been working with and the length of time it's been proclaimed the "best turnaround candidate," it will take more than "in line" results to earn back my trust. In fairness, it was encouraging that management was able to produce 4% organic growth, which was not only better than St. Jude, but it more than doubled Johnson & Johnson's (JNJ) device business.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,886.84 +82.04 0.46%
S&P 500 2,073.11 +2.46 0.12%
NASDAQ 4,775.3640 +9.9840 0.21%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs