We recently published a list of Jim Cramer is Watching These 8 Stocks. In this article, we are going to take a look at where Stryker Corporation (NYSE:SYK) stands against other stocks that Jim Cramer is watching.
Jim Cramer, the host of Mad Money, recently highlighted a surge in merger activity, pointing out that we’ve seen a significant uptick in deals over the past few days. He explained that this wave of mergers and acquisitions aligns with what he’s been predicting, a shift in M&A activity due to the change in administration.
Cramer noted that under the Biden administration, the Federal Trade Commission (FTC) and the Justice Department’s antitrust division have been very strict on mergers, often taking an aggressive stance against any form of corporate consolidation. According to Cramer, companies had grown increasingly reluctant to pursue mergers under Biden’s regulatory approach, as they faced the uncertainty of lengthy court battles with little assurance of success.
“And that’s why when Trump won in November, it became very obvious that we were looking at a deluge of M&A deals and these companies couldn’t even bring themselves to wait for inauguration day.”
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“Alright, so what do we make of this wave of deals? First, I gotta say, it’s just nice to see some mergers again and while this deluge was widely anticipated because of the change in administrations, it’s still good to see some confirmation.”
Cramer said it made him more confident in predicting that M&A deals will continue to increase, which is one reason why he recently added Goldman Sachs stock to his Charitable Trust portfolio as it has a major M&A advisory business that had been relatively dormant under the previous administration. He urged investors to consider buying the stock, noting that it’s an excellent opportunity.
More generally, Cramer expressed satisfaction in seeing so many companies once again pursuing mergers that make sense for their businesses. When examining the deals announced in early January, Cramer pointed out that while some of these deals might have faced challenges under Biden’s administration, most appear justifiable.
“So the bottom line: Gotta tell you, I’m just glad we’re back to a place where reasonable arguments like this will be considered fairly by the antitrust regulators rather than the situation we had under Biden where every takeover is considered anti-competitive until proven otherwise.
That’s very good news for the whole market, as lots of stocks will be going away. Given that we have so few IPOs, there won’t be a lot of new stock to replace it and a supply shortage, well, that is always good news for investors.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 8. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A medical team wearing surgical masks and gloves carrying out a hip or knee joint replacement surgery with the help of surgical navigation systems.
Stryker Corporation (NYSE:SYK)
Number of Hedge Fund Holders: 55
Cramer expressed approval of Stryker Corporation’s (NYSE:SYK) decision to acquire Inari Medical, Inc. as he highlighted that the two companies’ portfolios will complement each other.
“And look, the Hulu deal was just the appetizer because from Monday night through Tuesday, we got several multi-billion dollar M&A transactions. Let’s take them in chronological order, starting with Stryker, that’s that medical device maker spending $4.9 billion in cash to buy Inari Medical, which is mainly focused on treating patients with venous thromboembolism or VTE. It’s a condition that impacts up to 900,000 people in the United States every year.
Stryker says that Inari product portfolio is highly complementary to their neurovascular business. I’ve checked it out. I agree. I like this deal… Looking at the transactions we’ve seen just this week, while some of them likely would’ve been challenged by Biden’s ideologically driven regulators, most of them seem pretty justifiable. All of them make great business sense… Stryker doesn’t currently do much in the very specialized venous thromboembolism space where Inari Medical operates, huge for them.”
Stryker Corporation (NYSE:SYK) is a medical technology company offering a range of products including implants for joint replacements, spinal systems, surgical equipment, patient safety technologies, and neurosurgical devices, among other medical devices. On January 6, the company announced a definitive agreement to acquire all outstanding shares of Inari Medical, Inc. in a transaction valued at approximately $4.9 billion. Founded in 2011, Inari Medical holds a strong position in the peripheral vascular market, particularly in the growing field of venous thromboembolism (VTE), which will complement Stryker’s existing portfolio.
The acquisition is expected to close by the end of the first quarter of 2025. In addition to the Inari acquisition, the company has made several other strategic moves. In the third quarter of 2024, it acquired Care.ai, advancing its healthcare IT and wirelessly connected solutions. It also purchased NICO Corporation, which facilitates minimally invasive procedures for tumor and intracerebral hemorrhage treatments. Furthermore, the acquisition of Vertos Medical allowed the company to expand its pain management portfolio with minimally invasive solutions for treating chronic lower back pain caused by spinal stenosis.
Based on its performance so far, Stryker (NYSE:SYK) forecasts a solid finish to 2024, with projected organic net sales growth between 9.5% and 10.0%. The company also expects adjusted net earnings per diluted share to fall between $12.00 and $12.10 for the full year.
Overall, SYK ranks 2nd on our list of stocks that Jim Cramer is watching. While we acknowledge the potential of SYK as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SYK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
