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Stryker's rare double miss looks like quarterly noise, since full-year 2026 guidance is unchanged. Healthcare stocks are widely hated after five years of broken charts from the COVID boom-bust, but fundamentals say otherwise. They are the ultimate safety stocks, and the time to buy them is when no one wants them. x.comÂ
Stryker's 10% post-earnings drop is unwarranted because the numbers were fine. Organic revenue was in line, margins beat, full-year guidance was reiterated and MedSurg is tracking to the high end of its range. Keeping guidance after a cyber incident, despite end-market callouts from Intuitive Surgical and HCA, should be positive. The stock is at its lowest multiple since 2015, derated from over 30x to 18x, with Mako and neurovascular strong; a collapse in hospital buying is the risk. x.com x.comÂ
Stryker is a slow-and-steady compounder, leading knee and hip replacement as an aging population spends more on care. People over 65 spend 3x more on healthcare, and baby boomers are turning 65. A three-year FDA head start let Stryker install over 3,000 Mako robots, past 2 million procedures, locking in surgeons and hospitals. Each system drives recurring implant, disposable, software and service revenue AI cannot code away. Sales grow mid-teens, 4% above peers. x.comÂ
Stryker's soft summer reflects a deteriorating company, not macro weakness. No other device company talked about a soft summer, yet the market reads it as a macro issue and people want to buy Stryker, using it to express a preconceived thematic trade. The macro is fine; Stryker is the problem. x.com x.comÂ
Johnson & Johnson looks expensive at 22x for its growth, even though its story is clean. Limited loss-of-exclusivity risk until the 2030s, a cleanup via spin-off and divestments, and a pipeline in IBS and cancer could deliver double-digit EPS growth before 2030, and Street estimates are probably too low. Still, Stryker at about 20x 2027 earnings, with high-single-digit organic growth and strong M&A skills, beats JNJ at 21x, which tends to overpay for growth like typical large pharma. x.comÂ
UnitedHealth and healthcare look set to outperform through year-end, helped by midterm-year seasonality and defensive appeal. Over the last 20 years healthcare has generally done well from July through December in midterm election years. If the S&P 500 rolls into a bear market, UnitedHealth could outperform as investors rotate into defensive sectors. The bull case holds if medical cost ratios fall from AI and GLP-1 use and institutions rotate back into healthcare. x.comÂ
Hinge Health is fine because money has been funneling into healthcare and out of tech, and the raised-guidance catalyst is now behind it. The stock bounced off its 9-day EMA. x.comÂ
Demographics should offset the risks to procedure growth at surgery-related device makers such as Boston Scientific, CONMED, Edwards Lifesciences and AtriCure for the next five years, though those risks eventually bite. @Borlaug_ argues that falling obesity rates could cut a couple hundred basis points from long-term growth in many procedure categories, with policy the near-term negative. Intuitive Surgical flagged the ACA-sensitive areas well. Within devices, S-curve stories are preferable. … Show more
Boston Scientific looks reasonably priced for the risk after a 45% drawdown. It is a cardiology medtech leader with high-single-digit organic growth, a strong margin profile and a proven eye for tuck-in M&A, now at a mid-to-high-teens P/E, a discount to the market where it historically traded at a premium. The selloff happened for a reason, and the case fails only if the Penumbra deal and current revenue scale mean its growth is over. x.com x.comÂ
Healthcare's rotation from laggard to leader is not done, with the sector coming out of multiyear bases. It has been the most consistent sector in midterm election years for over 30 years, winning 80% of the time in the back half, and 22 healthcare companies beat the S&P 500 in 75%+ of midterms from 1994 to 2022. Focus names range from mature AbbVie, Lilly and UnitedHealth to large caps like Vertex and Amgen and riskier mid caps like Hims & Hers and Oscar Health. Start trimming from November. … Show more
Intuitive Surgical's surgical-robot moat is sturdier than the fear that sent it down about a third this year. The worry is that Medtronic and J&J will finally break its monopoly; maybe eventually, but surgeons train on its system for years and hospitals build workflows around it, so switching is hard. Thousands of placed systems keep generating recurring revenue for years. It's also a genuinely different bet from rates or AI spending. x.comÂ
