Orthopedic Journalists Change their Tune
BY JOHN CHOPACK, DECEMBER 13, 2005
During the middle of 2005, several journalists covering the orthopedic market from Reuters, TheStreet.com, Forbes and The Wall Street Journal Online were harping on the problems facing orthopedic manufacturers. These problems included heavy pricing pressure from hospital administrators, a Department of Justice investigation, and a shift in foreign currency exchange.
Since October, orthopedic journalists have gone radio silent. It seems that they may have finally realized they were beating a dead horse. However, during the past week the silence has been broken after Merrill Lynch held its most recent investor conference. During the conference orthopedic manufacturers stated that it wasn't as bad as the media and analyst had anticipated. A couple journalists have since recognized that the orthopedic sell-off was too exaggerated.
Barron's Online published an article titled "Orthopedic Stocks Are Mending Their Ways" stating that "pricing pressures no longer look so fierce. And as the fundamentals remain strong, more expensive devices hit the market and their valuations start to firm, shares of companies that make artificial hips (and knees) look hip once again." Louis Rukeyser's Wall Street newsletter wrote that "short-term worries pale against favorable global demographics of an increasingly active older population that should continue to boost long-term demand for innovative orthopedic devices."
So it looks like some of the media has changed their opinion of the outlook for orthopedic manufacturers. We expect the rest to follow shortly.
