Medtronic, Inc. (MDT), St. Jude Medical, Inc. (STJ): Obamacare Uncertainty Presents Opportunity

However implausible this scenario may be, assuming a static state for the company helps the investor understand how much she is paying for today’s operations and how much she has to pay for growth. Suppose the investor requires a 10% annual return on investment. St. Jude Medical, Inc. (NYSE:STJ) currently offers a greater than 10% return, which makes it stand out as a potential investment. However, Medtronic, Inc. (NYSE:MDT) and Boston Scientific may still clear the 10% hurdle rate if the two companies grow fast enough. But regardless of one’s hurdle rate, each of the three companies appears inexpensive compared to other opportunities in the market.

Bottom line

The above analysis is only a starting point for investment analysis. The crucial assumption — that each company will stay the same forever as it is today — is untrue. Investors must determine in which direction each company’s operations are likely to go from here — better or worse. While this type of analysis is beyond the scope of this article, I will say that each company likely has a bright future ahead of it. Therefore, long-term investors may do well purchasing any of these three companies in the current state of uncertainty.

The article Obamacare Uncertainty Presents Opportunity originally appeared on Fool.com and is written by Ted Cooper.

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