Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Wright Medical Showing A Growth Core, But Transition Will Be Messy

Sometimes simplifying a business makes things a little more complicated in the short term. When Wright Medical (NASDAQ:WMGI) elected to sell its hip and knee implant business to MicroPort for $290 million, the company put itself on path toward becoming a pure extremity and biologics med-tech company, a decision that improve growth and margins down the road. At the same time, though, the transaction removes a cash cow business and forces the company to rebuild its international infrastructure.

On balance, I believe the MicroPort transaction will lead to better shareholder value over the long term as it frees management to maximize the far more promising extremity and biologics opportunities. Likewise, it gives the company more flexibility in M&A...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details