This Day On The Street
Continue to site right-arrow
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!

Medtronic Is a Healthy Investment Despite Recent Struggles

Stocks in this article: MDT

NEW YORK (TheStreet) -- Last week Medtronic (MDT) announced third-quarter net earnings of $762 million, or 75 cents per diluted share, a decrease of 23% compared to the same period in the prior year.

That hasn't stopped investors from buying shares, which are up nearly 29% over the past year and up a fraction of a percent for the year to date, as of the Monday close of $57.60.

What do investors see?

My conclusion is they see a financially sound and viable company that is gradually transitioning beyond medical devices, taking definitive steps to expand within the current health care environment and connecting directly with patients as it morphs into a health-services company.

Part of the Minneapolis company's
setback in its previous quarter involved its Symplicity system, a renal denervation technology that is specifically designed to deliver low-level radio frequency energy through the wall of the renal artery to achieve renal denervation. This promising and innovative therapy for treatment-resistant hypertension patients failed the preliminary efficacy test during its first U.S. clinical trial.

The company hoped Symplicity would be a new source of revenue and earnings growth. With a number of its flagship products like defibrillators and pacemakers not selling at past levels, the company had used a growth-by-acquisition strategy to try and fill the void. This included the 2010 purchase of Ardian and its technology to help treatment-resistant patients such as those with renal diseases.

Between Medtronic's earnings disappointment and lowering its EPS guidance for fiscal year 2014, one would have expected its share price to take a hit. Here's the one-year chart, which includes its declining diluted quarterly EPS numbers (the orange line below).

MDT Chart
data by YCharts

1 of 2

Select the service that is right for you!

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!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • 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