With shares of Boston Scientific Corporation (NYSE:BSX) trading at around $6.35, is BSX an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Boston Scientific is a medical device company that operates in many areas, but nearly 70 percent of its business comes from the cardiac area. Boston Scientific has recently had to deal with recalls and litigation related to implantable stents. This hasn’t been the primary reason for poor stock performance over the past few years, but it hasn’t helped, either. However, now there are two factors working in the company’s favor. One, St. Jude Medical’s (NYSE:STJ) defibrillator leads have been deemed inadequate by the FDA. Two, Boston Scientific purchased a company called Cameron Health. This is important because Cameron Health has defibrillators without leads that go to the heart. Basically, it’s non-invasive. If this technology works as well as some think it will, then the upside potential for Boston Scientific is significant. Apparently, there are many people out there who are optimistic about the company’s potential. There has been big call volume as well as new insider purchases.
Boston Scientific is also focused on cutting costs, but this may be a negative if you’re a true patriot. The company will cut jobs in the United States and add jobs in China. This will be done for cheaper labor, which will help margins.
Let’s take a look at some important numbers for Boston Scientific.