St Jude Medical is a designer and manufacturer of cardiovascular Devices for the management of cardiac rhythm. It has been steadily dropping in relative value position since mid-July of last year until it became undervalued (> 20% below fair value) in the beginning of this year. At that time it was placed on the Buy Watch list.
The push into undervalued territory may have easily been caused by the mass selling of the market and not because St Jude Medical has any valuation concerns. At the present time the stock stands at 78.2%FV giving it a 139 ranking amongst the largecap index. Earnings are expected to improve over the next 12 months and the current dividend is above the market. The company just declared a 7% increase in the upcoming dividend and the market responded favorably.
The probability of merger activity impacting the company is only rated “C” so the chance of a merger or acquisition disrupting the direction of St Jude is only average. The stock represents a Market risk in the Health Care sector.
This stock definitely earns a Buy consideration.