In an effort to start fresh, the company is under new leadership. While a new vision can certainly help change the culture of the company, the new regime -- as competent as they may be -- not only must continue to do battle with the likes of Johnson & Johnson (JNJ) and Medtronic (MDT), but also adjust to law changes imposed by the Affordable Care Act (Obamacare) that could impact performance. On top of all of that, the stock was expensive.
Following the company's third-quarter earnings report, during which Stryker posted strong 7% year-over-year growth (constant currency), it seems that Stryker's stock prices is the only thing that has not changed, given that shares are at their 52-week highs. In impressive fashion, management has done just enough to put most of the company's concerns to rest.
With the Reconstructive business posting better than 9% year-over-year growth, it was clear that despite the concerns related to product recalls and possible pricing pressure, Stryker had no intention on ceding its market lead to Johnson & Johnson. Leading the way was Stryker's strong 20% year-over-year growth in Trauma and Extremities.
It wasn't all great news, though. While it's encouraging that Stryker's hip and knee businesses are growing in mid single-digits, I can't see much differentiation at this point between Stryker's performance and those of Johnson & Johnson and Abbott Labs (ABT). What's more, ahead of the report, it was evident that Stryker's MedSurg business, which includes instruments, endoscopy and medical devices, had become stagnant.