Wednesday, January 5, 2011

Mako Surgical (Nasdaq: MAKO), Wright Medical Group (Nasdaq:WMGI) And Healthcare Sector

Mako Surgical (Nasdaq:MAKO) and Wright Medical Group (Nasdaq:WMGI) were listed as the favorite and worst in the medical group coverage network of Brigantine Advisors.

Brigantine said, "The S&P 500 Index returned +12.8% in 2010 (+15.1% including dividends), with all 10 economic sectors in positive territory led by the consumer discretionary (+25.7%), industrials (+23.9%) and materials (+19.9%) groups. The healthcare sector was the worst performing category, rising only 0.71% including a loss of 3.9% for the medical equipment subcategory. However, the bifurcated nature of the market was pronounced in 2010, with the S&P MidCap 400 Index surging 24.9% and the S&P SmallCap 600 gaining 25.0%."

"On the long side, Brigantine Advisors continues to favor names with disruptive medical technology, strong market positioning and the opportunity to create new therapeutic protocols. Conversely, we believe the macro environment will not support a dramatic recovery in surgical procedure volumes in 2011, particularly in the orthopedics category, and given our expectation for more intense pricing pressures we believe many stocks in the group will struggle to generate alpha should investors continue to shift their focus to riskier assets and more cyclical sectors."

"Top picks for 2011: Our favorite long idea is Mako Surgical (Buy), a developer of the Robotic Arm Interactive Orthopedic (RIO) surgery system currently utilized in partial and total knee replacement surgery with potential applications in hip replacement and other orthopedic procedures. Our price target on MAKO is $25. Conversely, we have a Sell rating on Wright Medical Group (Sell), an orthopedic implant manufacturer with exposure to the hip, knee, extremity and biologics categories, and maintain our $13 price target on the stock."

Mako Surgical was trading at $14.53, down $0.07, or 0.48 percent, as of 11:56 AM EST. Wright Medical Group was trading at $16.37, down $0.01, or 0.06 percent.

No comments: