St Jude Medical Inc. Stock Hold Recommendation Reiterated (STJ)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- St Jude Medical (NYSE: STJ) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.

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Highlights from the ratings report include:
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Health Care Equipment & Supplies industry average. The net income has decreased by 22.3% when compared to the same quarter one year ago, dropping from $226.47 million to $176.00 million.
  • Net operating cash flow has declined marginally to $350.00 million or 2.05% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

St. Jude Medical, Inc. develops, manufactures, and distributes cardiovascular and implantable neurostimulation medical devices worldwide. It operates in four segments: Cardiac Rhythm Management, Cardiovascular, Atrial Fibrillation, and Neuromodulation. St Jude Medical has a market cap of $11.83 billion and is part of the health care sector and health services industry. The company has a P/E ratio of 16.1, below the S&P 500 P/E ratio of 17.7. Shares are up 6.7% year to date as of the close of trading on Wednesday.

You can view the full St Jude Medical Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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