Phil Town
Phil Town

Remember our Stryker Homework? Here's a followup from Lyn:

"I did a little more research on Stryker and found out that the earnings dip in 1998 and 1999 were due to the acquisition of Howmedica from Pfizer.  And last year Stryker acquired SpineCore, Inc. and reported only 3% growth but the underlying growth was 29%.

The orthopedic implants industry itself may have a slight slow down due to pricing power but in the Grand Scheme of things they are talking only about 1% or 2% which is not a dramatic change.  Styker as a company itself has been conservative with their pricing increases.  So even if a 2% price increase goes to 0% it really will not affect their ability to continue their 20+% growth.

So this company is looking more and more like a Rule #1 Company!  Am I missing anything important?"

Nope. And then she asks whether, if the price starts to move up, we should jump in.

Answer:  We only go when the big guys go.  We're trying to buy something that is going to go up 50% in a reasonably short time - a few months.  It won't do that without Institutional money piling in there, so there isn't any real point in trying to get in way before these guys do.  So wait for the arrows or, if you are on MSN, watch the three Tools:  MACD, Slow Stochastic and Moving Average.