Stryker 2Q numbers

Stryker reported second quarter numbers on Thursday evening, raising their guidance for the year on an improved outlook. To borrow a line from Jim Cramer, there is always someone making money in some market. You can try, yet you will never suppress human ingenuity. We have seen technological advances in the fields of medicine, and that continues to be the case with improved hardware and software across all fields. They augment each other well, the science of medicine is more receptive to these changes. As per their website, Stryker "offers a diverse array of innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine, which help improve patient and hospital outcomes."

The products includes bone cutters, surgical equipment, hospital beds, reconstructive products, like hips, knees, ankles, as well as the spine and craniomaxillofacial. Huh? Face reconstruction, people have accidents and need to be fixed. This is the technology age, where humans are being given a new lease on life with their new machine made products. And the richer that people get, the longer they live as a result of improved diets, improved science around exercising and improved medicine, the more commonplace these procedures will become. Even hip replacements are more prevalent now than ever before.

Germany and Switzerland sit above the OECD average of 154 per 100,000 people, with 296 and 287 respectively, in places like Chile and Mexico, that number drops to well below 20 per 100 thousand. Diets, average age, longevity, these are all reasons that people are receiving more and more procedures to improve their lives. If you think about it, when you part way with your money here to invest in a business like Stryker, you are allocating capital to a business that wants to advance humanity, to fix and repair ordinary people. So much so that this company has increased sales tenfold over a period of 20 years, through the worst financial crisis of our time.

This is still very much US based business, and that is why it is exciting. 70 percent of their sales comes from their "home", nowadays many businesses want to be multinationals, you cannot confine yourself to x number of customers only. Breaking down some of their other revenue numbers, orthopaedics represents 42 percent of group sales. MedSurg (cute name for Medical and Surgical) represents 39 percent of total sales, these two businesses are their two pillars for now.

Numbers going forward, the range in EPS is expected to be 5.06 to 5.12 Dollars, which means forward with the stock at 100.97 Dollars trades just less than 20 times. Currently the yield is less than 1.4 percent. They still plan to buy back around 2 billion Dollars worth of shares in the next two to three years as they see fit. This is a company that will continue to consolidate the industry, on the conference call the CEO (President and Chairman) of the company, Kevin Lobo said that mergers and acquisitions is their first priority and use of cash. Share buybacks seem pretty aggressive, dividends seem a little lower on the chain of importance. Recently the company bought a Turkish hospital bed manufacturer, located in Kayseri. Turkey's fastest growing city, it is no coincidence that this is an economic free zone.

There are many reasons to own this company, they will remain at the cutting edge of technological innovation in the healthcare industry, their products are highly regarded by professionals. That is always the most important thing for me, you can have the most amazing product, if there is no demand, you go nowhere. Stryker will see more and more demand in the years to come, as the middle class population globally continues to grow and age too, they will enter new geographies. The future is bright for them and their products, as it is with the whole industry, we continue to recommend this company as a buy.