Medical Supplies & Devices: MedTech Sentiment and Positioning — Asia Edition

Across the week, the most frequently discussed stocks were: (1) ISRG; (2) BSX; (3) SYK; (4) DXCM; (5) ABT; (6) EW; and (7) MDT. Lower-growth and SMid MedTech were not discussed much. With absolute valuations lower than vs. history for the group (~17x vs. ~18x NTM P/E average, and a relative NTM P/E discount of ~14% vs. the S&P 500 vs. a 15-20% premium historically), investors are more interested in the higher-growth assets, now at more approachable levels than in the past, rather than the slower-growth assets at very low absolute multiples. Companies growing 5%+ used to garner 2.5x-3.5x turns of FY1 earnings multiple per 1% of sustainable organic sales growth, and those growing <5% would have valuations of 1.75x-2.5x;