Posted by lionel319 @ Wed 17 Mar, 10, 12:24AM under Investing
Last week, on the weekly stock market updates for Week 10 (link), I mentioned something about ALTR (Altera), if you recalled.
Here's the chart which I posted.
Yesterday, the range was still within the pennant pattern. (link)
Tonight, I was starring in front of my monitor for the entire 1st hour, and this is what I see ...
ALTR did indeed broke out from the Flag (triangle), and did managed to stay considerably strong above it for the entire 1st hour of trading.
I know I'm being itchy.
I know I'm being naughty.
This isn't the normal stuff that is within my realm of expertise, that I usually trade.
But, I just couldn't pass this up.
Maybe because of the fact that I have been sleeping, eating, dreaming, shitting, and peeing on ALTR for the past few years, that makes me having the urge of wanting to see this god damn thing breaking thru that marafaking $25 roof that has been there for the past 10 years !!!
And therefore, in order to prevent my urge from evolving into something else ..... bad ...... I decided to bit the bullet !
We shall see how this flag shall perform for the next couple of weeks to come.
Stay tune ......
Muarghhahahaahahahahah
^_^
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tag : option, stock, market, trading, call, put, altr, pennant, flag
Industry : Medical Appliances And Equipment (link)
Business : Stryker Corporation (the Company or Stryker) is one of the world’s leading medical technology companies with the most broadly based range of products in orthopaedics and a significant presence in other medical specialties. Stryker works with respected medical professionals to help people lead more active and more satisfying lives. The Company’s products include implants used in joint replacement, trauma, spinal and craniomaxillofacial surgeries; surgical equipment and surgical navigation systems, endoscopic and communications systems; patient handling and emergency medical equipment as well as other medical device products used in a variety of medical specialties. Stryker was incorporated in Michigan in 1946 as the successor company to a business founded in 1941 by Dr. Homer H. Stryker, a leading orthopaedic surgeon and the inventor of several orthopaedic products. The Company segregates its operations into two reportable business segments: Orthopaedic Implants and MedSurg Equipment. The Orthopaedic Implants segment sells orthopaedic reconstructive (hip and knee), trauma and spinal implant systems and other related products. The MedSurg Equipment segment sells surgical equipment and surgical navigation systems; endoscopic and communications systems; as well as patient handling and emergency medical equipment.
Economic Moat :
10 year average:-
ROE
> 15%
ROA
> 10%
Net Margin
> 15%
FCF/sales
> 15%
Installing most of these implantable devices into human bodies requires a vast amount of time/effort to be learned. It's a way of locking customers to their own brand once the customers (hospitals/physicians/surgeons) are used to one brand, because switching to another brand will be a painful process, and very costly in terms of time and sometimes money wise.
Growth :
M&A
Acquiring small companies which are within their realm of expertise.
New product/services
Through acquiring new businesses, this allows them to widen their product base and variety. New product feature can be implemented into current existing products too.
Profitability :
Free cash flow & Revenue has been growing steadily.
Same goes to Net Income.
Margins metrics & Financial Metrics are improving.
Financial Health :
Long Term Debt
No Long Term Debt !
Short Term Obligations
N / A
Competitors :
Stryker has one main , strong competitor, Zimmer (ZMH), which has almost entire of it's product line overlapping with each other.
There are few other companies which falls within the same business field. A few of those that are worth mentioning are listed below:-
Just watched Alice In Wonderland (link) last night.
Quite a nice and relaxing movie, I would say. Do watch it if you have the time. :)
Back to business.
SPY made a new high for the year yesterday.
In fact, SPY has been on 20 up days out of the past 25 days.
Which actually has brought the market to quite an extreme overbought region (not shown here).
The previous high made in early January, around $115.25 would be seen as it's immediate support.
If a retest to that level holds, and SPY bounce back, then there won't be any overhead resistance, and it looks like it's gonna be a very bright future for us for the next coming few weeks.
But if $115 level breaks, then the next support to look for would be at the $113 level, and things might get ping-pong around between the $113-$115 level.
A broader view on the GOLD index.
Seems like the larger trend line (the blue trend line startsince Oct) has turned from support to resistance.
Looks to me like an inverted Head and Shoulder pattern (link) has emerged.
The green dotted dash line is the neck line of the inverted head and shoulder.
Seems like, Gold will be range bounded in the next few trading sessions, seeing price toggling between the neck line($1140) and its major support($1075).
Oil is seeing the same fate as in the SPY.
It's sitting right at it's previous top right now, hovering around the $82.50 level.
Do you see a Triple Top pattern (link)? Looks like one to me though.
If it comes back down, the $70 level will be the MAJOR support for oil.
Let's take a look at USD.
A few weeks ago, we talked about the $4 targetted price move from the Flag or Pennant pattern (link).
And ever since USD reached its targeted move around $80, it has been showing signs of range bounding between $79.50 and $81.50.
These levels has had a history sign of erratic indecisive price movement in Jun last year too.
Sooner or later, it has to break away from this range bound.
All we need to do is to monitor which direction is the breakout move, and trade with it.
Talking about Flag and Pennants, this chart (ALTR) does seems like it's showing the same thing too.
Altera shows that it has found a base at around $21, ran straight up to $25.
And has been forming a tight, small flag (price congestion) at around $25.
If it breaks above this flag, and move higher, a price target of $29 looks pretty possible to me.
Hmmmm ................. This thing looks pretty tasty to me.
Analysis Of Industry Sector : Medical Appliances & Equipment
Posted by lionel319 @ Mon 08 Mar, 10, 07:47PM under Investing
Sector : Medical Appliances & Equipment
Description :
Health Care is one sector which is a necessity to every human being.
People can live without iPhone, people can live without Coke, but in order stay healthy to enjoy those things, everyone needs medical attention.
Here're few of the categories:-
Cardiovascular
Heart Valve
Replacement of Heart Valve
Pacemaker
To regulate the heart beat which beats too fast
Orthopedic
Joint replacement
Replace wear/tear joints such as hip, shoulder, knee, etc
Spinal Disk Replacement
Replace the injured spinal disc
Medical Instruments
Hospital Daily used instruments
Syringe, needles, etc ...
Other high tech stuff
Diagnostic systems, devices used by other pharmaceuticals/bio-scientists, etc ...
Economic Moat :
High Switching Cost
Each company builds their own prototype of devices (hip joints, heart valve, etc ...)
The installation process is different from company to company.
Surgeons needs time to really relearn how to install a new brand of hip joint if they were to change to another new brand of device, which is very time consuming.
High Entry Barrier
It's not cheap to build a start up company that has to compete with all the existing huge ones.
Most hospitals/surgeons are reluctant to change from using the old, reputable and trustworthy brands rather than going for a newly launched brand product.
Growth & Profitability :
Pricing Power
Companies have great pricing power.
Because they know that the high switching cost for their customers are what matters.
After all, most customers (hospitals, surgeons, or even patients) don't really care how much they pay for their product. The bills are footed by the Insurance Companies (which is why insurance companies are not a so wonderful investments)
New/Unique product Features
Companies holds patents to their unique products' features.
Product line gets their features enhanced and improves on every new roll out.
With every new feature, this will attract more sales, and market shares.
Which makes this another reason why it has high entry barrier for new startup companies, because it's extremely difficult (if even possible) to start with a new product which could surpass the technology of a product which have gone thru 10-20 years of revisionary improvement.
Acquisition
One of the ways for companies of this sector to grow is to buy Patents thru acquiring other companies which holds useful patents.
Acquiring small companies tends to perform better than buying over large ones.
Often, companies will acquire another small companies which are having their product still under the R&D phase (product is not launched yet).
The extra premium paid for this company will be charged under the Income statements IPR&D(In process R&D) category. Do take note.
Financial Health:
Due to the fact that companies here have great pricing power, they too have high profit margins, mostly around mid teens or more (>15%).
And because of that, most companies should have a decent amount of free cash flow pouring in every year.
Which makes them somewhat a very good cash cow machine.
And as such, there shouldn't be too much of a debt burden seen in companies here.
but sometimes,taking debts are unavoidable in everyday business.
So long as the debts are manageable, it should be fine.
Companies : A few companies that are worth mentioning are listed below:-
Zimmer (ZMH)
Stryker (SYK)
MedTronic (MDT)
Becton Dickinson(BDX) (though not really a direct competitor, it does fall into the Medical Instruments Supplier industry too. Worth a check)
Business : Medtronic, Inc. (MDT) is a global player in medical technology. The Company operates in seven segments that manufacture and sell device-based medical therapies:
Cardiac Rhythm Disease Management,
Spinal,
CardioVascular,
Neuromodulation,
Diabetes, Surgical Technologies
Physio-Control.
Through these seven segments, the Company develops, manufactures and markets its medical devices in more than 120 countries. Its primary products include those for cardiac rhythm disorders, cardiovascular disease, neurological disorders, spinal conditions and musculoskeletal trauma, urological and digestive disorders, diabetes, and ear, nose and throat conditions. The primary markets for products are the United States, Western Europe and Japan.
Economic Moat :
10 year average:-
ROE
> 15%
ROA
> 10%
Net Margin
> 15%
FCF/sales
> 15%
Installing most of these implantable devices into human bodies requires a vast amount of time/effort to be learned. It's a way of locking customers to their own brand once the customers (hospitals/physicians/surgeons) are used to one brand, because switching to another brand will be a painful process, and very costly in terms of time and sometimes money wise.
Growth :
M&A
Acquiring small companies which are within their realm of expertise.
New product/services
Through acquiring new businesses, this allows them to widen their product base and variety. New product feature can be implemented into current existing products too.
Profitability :
Free cash flow & Revenue has been growing steadily.
But not the case with Net Income & Net profit margin.
R&D spending has been consistent
But SG&A expenses growth has been out pacing the Revenue.
Financial Health :
Long Term Debt
Long term Debt = $6.7B
Last year's net income at $2.1B,
it'll take MDT 3 years + to repay back the loans.
Although it's not at the conservative side, it's still an acceptable number.
Short Term Obligations
Interest Expenses = $182M (for year 2010)
Last year's net income = $2.1B
Interest Coverage Ratio = 11x
Still Acceptable
Competitors : There are companies which falls within the same business field. A few of those that are worth mentioning are listed below:-
Zimmer (ZMH)
Stryker (SYK)
MedTronic (MDT)
Becton Dickinson(BDX) (though not really a direct competitor, it does fall into the Medical Instruments Supplier industry too. Worth a check)
Summary :
These are the Other Expenses in year 2009, which sums up to around $1.6Billion !!!! (Almost 73% of Net Income !)
4 charges we made against MDT, (3 from J&J and the other one, i forgot already)
Sales has not been growing Fast enough (9% for the past 5 years), compared to it's expenses growth in (12% for the past 5 years!)
Company is currently spending on restructuring.
but, there's so much a company can do in cost cutting. Themost important thing here is to focus on improving into top line (Revenue growth).
I'm not very comfortable with the deteriorating numbers shown right now.
Will still keep this company in my watchlist for future if it's condition improves.
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Last week, on the weekly stock market updates for Week 10 (
Quite a nice and relaxing movie, I would say. Do watch it if you have the time. :)
