Healthcare

Report by MedMine

The trade tariffs imposed by the Trump Administration are expected to raise healthcare costs, disrupt the supply chain and make care less affordable for patients. Companies are trying to mitigate these issues through initiatives such as on-shoring manufacturing and sourcing from unaffected countries; however, these measures face regulatory challenges and will require time to implement. Within the medical devices and hospital supply sector, the impact of these tariffs varies among companies. For instance, Johnson & Johnson, Medtronic and Intuitive Surgical have manufacturing exposure in China and Mexico, whereas Boston Scientific and Edwards Lifesciences do not. MedMine monitors spending on medical devices and hospital supplies at ~3,000 hospitals and related healthcare providers across the US, providing valuable insights into the effects of these tariffs.

Report by Trivariate Research

Trivariate analysed the top 500 US equities for five factors beyond the market: size (top 100 vs. 401-500), growth vs. value, high-quality vs. junk, liquidity and momentum. They focused on 3 different portfolios (min-vol, max-Sharpe, max-return) to show a range of outcomes. Over the last 20 years, the “efficient frontier” or optimal beta for a median portfolio appears to be between 0.95 and 1. If you are looking to lower your portfolio beta efficiently, owning high-quality value stocks with relatively low liquidity is a prudent strategy (e.g. Exxon Mobil, Philip Morris, Lowe’s, Medtronic). If you want to take more risk, the optimal factor loadings would be to add to highly liquid growth stocks that are junk quality (e.g. Tesla, Applovin, Micron).

Healthcare

Report by Paragon Intel

Paragon’s analysis of CEO Bryan Hanson includes interviews with ten former colleagues who worked with him at Zimmer Biomet, Covidien and Medtronic for 110 years, combined. Sources (6 positive, 2 negative, 2 neutral) focused on his strengths as a builder of culture and teams. He begets loyalty in those who work with him, has a high level of transparency and strong communication skills. In fact, his focus on company culture may overshadow other areas, as he and those around him can become absorbed in the excitement of cultural transformation and big-picture ideation at the expense of more disciplined strategy. All the same, Hanson will take a portfolio management approach to SOLV, honing core areas of the business through both divestments and tuck-in acquisitions.

Healthcare

Report by Abacus Research

PODD is on the cusp of a new product cycle for Omnipod 5 for diabetes 2 patients which will drive upside to 2H24 and 2025 consensus estimates. Abacus also argues the market’s GLP-1 fears are overplayed (impact will be negligible over the next decade / have no impact on type 1 diabetes, PODD's core customer). If this is proven, the multiple should expand. Although competitors Medtronic and Tandem will launch new products over next few years, their success is not guaranteed. For now, Omnipod has a first mover advantage. Abacus sees a path to $3.6bn in 2027 revenues (2023-27 CAGR of 21%) and an EPS of $6.50 (25% CAGR).