This Day On The Street
Continue to site
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

St. Jude's Growth Is Looking Sickly

As it stands today, an argument can be made that St. Jude is gaining share on both Medtronic and Boston Scientific. The question, though, is whether this supposed share gain in one segment is enough to send this stock to its current 52-week high. This is where I disagree, even if we were to credit St. Jude for its solid performance in cardiovascular, which was up 7% year over year. Relative to expectations and the sector's performance, it's a decent number. But we have to then reconcile the 8% growth in atrial fibrillation. Although it's a strong high-single digit number, it's still 2% short of the October quarter. St. Jude essentially took a step backwards.

Although it's encouraging the company is may be gaining share against Medtronic in ICDs, this was offset by St. Jude's decline against Johnson & Johnson in atrial fibrillation. And it doesn't appear as if prior excitement about the company's new catheters and its MediGuide system were rightly placed.

What's more, there's still the overhang of the Food and Drug Administration, which sent St. Jude a warning letter regarding the safety of the Durata Leads. Despite this, that the neuromodulation business was up 8%, a pleasant surprise.

But as I've said, I don't believe this is enough to overlook the potential risks that still remain in this stock. Not when investors can buy Johnson & Johnson at a multiple that is 8 points less and pays out almost double in the dividend.I'm not here suggesting that St. Jude is a bad company. But with the recent drop in gross margin, leading to a 5% decline in operating income, I just don't see how the stock makes sense right here.

At the time of publication, the author held no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
STJ $76.20 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs