Brad Ferris

Steering Clear of Stryker; Larger Medical Device Cos Are Better Positioned

Stryker is diversified in about a 60/40 split between their large Ortho products & other medical supply/device products. They are still largely dependent on Orthopedic implants for the majority of their business and in an economically sensitive environment companies (hospitals) may be more conservative in their capital expenditures for medical stretchers, endoscopy supplies or OR materials.

The point I am making is no company is economically insensitive and when evaluating Stryker an investor needs to be aware of all revenue sources for the company and the economic challenges each segment faces.

Steering Clear of Stryker; Larger Medical Device Cos Are Better Positioned

Captainess,

I like your reference to stocks/industries as economically sensitive. I often refer to them as "Recession Resistant" rather than the frequently used "proof". I wrote about this on my blog a few months ago also. Proof gives the perception that something is invincible and no company has that luxury (to my knowledge). As great as a moat may be, it is still susceptible to economic pressures from costs, revenues & inflation.

Steering Clear of Stryker; Larger Medical Device Cos Are Better Positioned

Thanks for the comment andyn. I still think the company will post a profitable 2009, but with expectations high I feel the market could possibly punish the stock if it's not able to meet its targets.