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