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Why Smith & Nephew Will Outperform in 2013

Monday - 12/31/2012, 4:40pm  ET

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, British medical technology company Smith & Nephew has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Smith & Nephew and see what CAPS investors are saying about the stock right now.

Smith & Nephew facts

Headquarters (founded)

London (1856)

Market Cap

$9.8 billion

Industry

Health care equipment

Trailing-12-Month Revenue

$4.2 billion

Management

CEO Olivier Bohuon (since 2011)
CFO Adrian Hennah (since 2006)

Return on Equity (average, past 3 years)

23.1%

Cash/Debt

$445.0 million / $69.0 million

Dividend Yield

1.8%

Competitors

Johnson & Johnson
Stryker

Zimmer Holdings

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 92% of the 125 members who have rated Smith & Nephew believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, dreamjob, succinctly summed up the bull case for our community:

Management at [Smith & Nephew] has achieved very strong [return on invested capital] and Cash ROIC numbers. Sales, earnings, and book value are all growing at a healthy clip. There are positive, stable, and growing owner earnings and free cash flow. There is also manageable debt here. I believe this is priced slightly below intrinsic value. I also like that this has recently become a 5 Star CAPS stock.

If you want market-topping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite its five-star rating, Smith & Nephew may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

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This article was originally published as Why Smith & Nephew Will Outperform in 2013on Fool.com

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