Lioness Associates, Inc.

Economic & Corporate Risk/Yield Reports

August 5, 2012 - St Jude Medical (STJ) - Risk/Yield Update for 2012

Since our last article on St Jude Medical (see below) on April 7, 2012, the stock has performed only slightly better as compared to the DOW from the beginning of the year.  There is also an upcoming class action lawsuit (see article) relating to the device leads.

This company might see some improvement in stock price based on a general economic improvement globally and in the USA but, based on astrological configurations, it seems that this company is apt to be spending more time with legal issues over the next few months and thus the Delta Core is trending in the risk area of the graph.

This update also adds the STJ IPO 2012 Risk/Yield graph which depicts the preponderance of risk factors over yield factors for the rest of the 2012 year.


 

 
April 7, 2011  -- St. Jude Medical 2012
St. Jude Medical has been in the news recently regarding it's electrical leads for the heart defibrillator. According to news stories, the wires were protruding from the coatings resulting in shorts.  Link to story.

Checking the STJ IPO Delta Core/Transient 2012 chart does show some down drift into "Risk" at the March 2012 period but, given the serious of the story, I would have expected more.  It does seem that the stock price bounces back into "Yield" territory but, it is not a move with much force behind it.  Whatever bounce does occur looks likely to deflate as summer approaches.

Interestingly, since the "risk" was not significant in the "IPO" chart, I looked at the "Incorporation chart" and that chart does have more significant "Risk" being shown (refer to STJ Incorporation Delta Core/Transient 2012 graph). Note, the IPO chart looks at a company from the viewpoint of investors while the corporation chart looks at the company from the viewpoint of the company itself - a fine distinction.

Delving into the charts a bit further, this company does have some "good data points" and while they do not overcome the negativity at the March/April 2012 period, they do help to deflect some of the "risk".  Astrological indicators point to still having good opportunities for earnings and for new products but, the current problem will add tension, drive focus and resources from developing and testing new products to rechecking old products. The leadership of the company appears at this point to withstand attacks but, is likely to be undermined in the future if this problem is not successfully resolved in a few months.

St. Jude medical has made requests for the article to be withdrawn (see article here) and also provided additional detail in a news release on their website (link here).  Examining the incorporation chart data in more detail brings into questions whether the research data the article was based on might have been manipulated or not shown to the best advantage .. maybe skewing the data so it looks worse than it is.  Since this "tweaking of the data" is being hinted at in "incorporation chart" it is not likely to be "public knowledge" although, news releases in June/July might provide more positive details for the position of St. Jude Medical but, the data might be too complex for the casual investor to assimilate. Even if the data is not as damaging as it was initially made out to be especially in comparison with other manufacturers -- the damage may have already been wrought.

We'll check back in with this company in a few months .....

 

            STJ IPO Delta Core/Transient 2012 graph


       STJ Incorporation Delta Core/Transient 2012 graph

Disclosure as of 4/7/2012 - St. Jude Medical (STJ) is not part of our portfolio at this time.