Stryker Q4 - Good Organic Growth

Medical Technology giant Stryker which is famous for their medical devices, surgical tools, hip and knee replacements released market beating Q4 and full-year numbers. The momentum continues as net sales for the quarter grew by 8.8% to $4.1 billion thanks to improving margins in the overall business as well as a top performance from the Neurotechnology and Spine business which grew net sales by a staggering 18%.



The performance spread across the portfolio, net sales for the quarter was as follows: Orthopaedics saw an increase of 6.7% to $1.5 billion. MedSurg grew by 6.8% to $1.8 billion, and Neurotechnology and Spine grew by a mouth-watering 18% to $827 million. Product recalls stayed at minimal levels as the company continues to find incremental improvements using the latest technologies in the production process.

Full year numbers reflected the same momentum with net sales up 9.4% to $14.9 billion. 2020 marks Stryker's seventh consecutive year of accelerating organic sales growth thanks to the diversification of their product portfolio and geographic positioning.

The company made a cash tender offer of $30.75 per share or $5.4 billion to acquire Memphis based Wright Medical Group; a company that focuses on extremities and biologics, which in laymen terms means bone implants. Stryker expects to add just over $900 million in revenues from this business driven by their shoulder, ankle (where it enjoys a 70% market share) and augment devices which will be driven by expanding treatment rates, as well as cost savings of $100m-$125m in the first three years of the acquisition.

Stryker continues to enjoy the margins of a Bottega Veneta but with the volumes of an H&M thanks to its market leading trusted brands. Unlike Medical Insurers and Pharmaceutical companies, the shares of medical device companies aren't driven by who potentially gets elected as the next president in the US. Stryker continues to be our favourite in the medical devices space, do you have them in your portfolio?