Conmed transition territories.

"losing market share" dats the truth! At least HR is being honest to prospective job applicants. Anyone know what the Revenue and the Price of the recent acquisition is. Why the big secret unless trying to cover up the loss of current business?

 

49.19, still confident?

 

What is the rationale for a 87 P/E ratio for Conmed, when other companies in the space (Stryker, or Zimmer) are in the low 30's? Is Conmed on the verge of releasing some technological product breakthroughs?

 

Typically associated with an expectation that a sale of the company is imminent, since it has been inflated for a extended period during which time the company incurred a large expense (surgiquest) and further deteriorated its own core sales, failed to rejuvenate a product pipeline and sold off hard assets it is hard to believe the ratio with stay that high on a relative basis. So do you think the price will come down or the earnings will go up? If you think the price... time to short the stock.

 

Conmed has bizarrely positioned itself so that the sale of the company is extremely unlikely and difficult. After years of missteps and lack of investment, the core Linvatec brand is a has-been. The purchase of Surgiquest helped maintain revenue figures, but they paid too much, don't have adequate distribution, and a general surgery/robotic focus. So what is the focus of their current development efforts? Who knows, certainly not the field. Meanwhile, sales channels in the US continue to be a $hit show. OUS sales channels are doing their best despite an ancient portfolio and nothing good coming down the pipe. Financials continue to be propped up through attrition and cost cutting efforts, not organic top line growth. And competition continues to ramp up competing product lines, distributors, and tuck in acquisitions. So what aspect of Conmed appeals to a potential acquirer? Not as a tuck in acquisition. Not their current or future products. Not their sales channels. Not their finances. And not their management team, which designed this perverse strategy. So nothing will happen.

 

The top 25 holders of Conmed Stock are Institutions and they hold 91% of the outstanding shares worth $1.25 BILLION and they have been increasing their positions. One of the Institutions is defined as an Activist Investor and has filed a 13D (SEC Form when the intent of investment is merger) and the same Institution has an employee of their's sitting on the Conmed Board of Directors. These facts are all public information and easily found. Since the only reason these 25 investors are sitting on their positions is that they believe their value will increase due a sale, you have to believe they have a pretty good understanding of who the potential acquirers are and approximately what they are willing to pay. The only questions are will they continue to give CH more time to execute his story he gave them at the time of the Proxy fight that he will increase the value of Conmed. Has he increased the value of Conmed after almost 4 years as CEO? Or did they agree to give him his 5 year employment agreement which allows him to max out when the sale comes regardless of performance?

 

Institutional investors have too much cash and they're fighting for safe places to store it. Conmed is a fair bet, but those investors definitely aren't placing all their eggs in one basket. Sure, there are some Conmed assets with residual value and the M&A vultures are right to continue their due diligence. IMO, the only hope for a deal is following a tax holiday on cash held overseas. Medtronic and JnJ will have to do something with those billions besides a fat dividend. If no deal is cut by then look for those institutional investors to dump Conmed shares until someone buys them off the discount rack.

 

Thanks to BL !