On June 14, Etsy announced a seller transaction fee increase from 3.5% to 5.0% (which is also now inclusive of shipping costs). This was long thought to be one of the major revenue levers that management had to pull, and they will be doing so from a position of strength as gross merchandise sales (GMS) growth has now accelerated over the last four consecutive quarters. The stock is now up over 25%, but investors remain bullish on the company's future. The key topics that investors are talking about are:
- The other major areas of opportunity for Etsy, including more marketing, better discoverability, improved conversion rates, and more seller tools
- Possible seller backlash and competitive threats Read More
- Mylan's recently received approval of Fulphila, their Neulasta biosimilar. Analysts expect the drug to contribute to management's guidance and importantly, demonstrates the company's ability to bring complex generics and biosimilars to the market
- Investor focus now shifts to two upcoming, and sizable, opportunities: gAdvair on June 27, and gRestasis on July 31. Read More
Mylan has drifted down by about 14% since early March as institutional investor concerns have grown over that time. Concerns have specifically centered around risk to 2017 and 2018 guidance due to approval delays in the company's new product pipeline. Additionally, the company's core business (generics and Epipens) have had new developments that have raised concerns over their outlooks as well. Read More
Medtronic is a pure-play medical device company. The company is a mid-single digit revenue grower driven by product segment innovation, international growth, and acquisitions. Profitability is further boosted by integration of their acquisitions and growth within their high-margin segments. They also generate strong free cash flow and aim to return 50% of that to investors.
Within Medtronic, The Diabetes Group is the smallest, but fastest growing, segment and is arguably the most promising one among all of them. Much of the excitement comes from its upcoming 670G device, which can potentially upend diabetes treatment and boost growth rates for multiple years. Read More
The company received a CRL (complete response letter), which is essentially a non-approval from the FDA. Mylan stated that they would review the letter and provide an update after reviewing and discussing with the FDA.
What does this mean for the stock? Read More
Many of us know of Mylan due to the EpiPen controversy, which became the poster child for healthcare and its out-of-control pricing in America. In late August of 2016, the media began reporting on the significant price increases on the EpiPen, which had increased from $100 in 2007 to $609 in mid-2016. Up to that point, the drug had become the primary component of Mylan's earnings, with a significant portion of profitability coming from the business (with some estimates placing it at 40% of its operating profit). Read More
Johnson and Johnson stumbled a bit in the second half of 2016. The stock declined slightly 11% from July to late January as investors began to focus in on the Pharmaceutical segment and its growth trajectory. The segment, which represents 47% of sales, has driven much of JNJ's top-line growth over the last four years with over 10% organic growth each year. However, growth in this segment began to slow noticeably to 2% in 4Q16. Additionally, management gave segment guidance that implied growth of just 2-3% in 2017. In turn, street estimates were lowered.
What has been driving the growth moderation and the investor concerns? Read More