Tagged: GMED
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<strong data-uw-styling-context=”true”>Globus Medical (NYSE: GMED) doesn’t sound like the most exciting opportunity to many investors. In a world of self-driving electric vehicles, semiconductor chips, and visionary leaders, the idea of investing in a business that sells screws, rods, and other instruments used in spinal procedures may sound like it just doesn’t cut it.
Globus’ legacy business manages to pay the bills while also generating a pretty penny, but Globus has been able to grow much faster than many have expected thanks to its robotic spinal surgery platform, ExcelsiusGPS. ExcelsiusGPS has started to gain traction across the market, growing nearly 75% in the most recent quarter. Globus has been able to accelerate adoption for this massive opportunity by funneling its large cash flow generation into marketing and sales for ExcelsiusGPS technology. This division, called “enabling technologies,” is still just a fraction of Globus’ top line, implying that management sees long-term opportunities for robotic surgeries to become integral to its core business.
Globus is an especially timely opportunity for investors today as the business has shrunk nearly 20% over the past six months, in part due to skepticism around slowing international growth. However, digging deeper reveals some temporary headwinds in the Japanese market that are overshadowing strong performance across other international markets. We view the market’s shorter-term reaction as a buying opportunity for long-term investors looking to add a stable yet growing business to their portfolio.