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Smith & Nephew's (SNN) 5% Stake Acquired by Cevian Capital
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Smith & Nephew SNATS (SNN - Free Report) is likely to witness operational improvements in the future as Cevian Capital, a Swedish investment firm, purchased a 5% stake in the company. Per the Securities and Exchange Commission disclosure, Cevian Capital now has 5% of voting rights attached to the shares. This purchase makes the investment firm the second-largest shareholder of Smith & Nephew.
Cevian Capital is known to collaborate with the boards and management teams of companies where it buys equity to promote plans that boost the long-term viability, profitability, and competitiveness of those companies. This frequently entails enhancing corporate strategy, organizational design, financial management, corporate governance, operations, and sustainability in general.
More on Cevian Capital and Its Impact as an Activist Investor
An activist investor is an individual or an institutional investor who aims to get seats on the board of directors of the target company to obtain a controlling stake in the business. Activist investors most typically look to uncover perceived hidden value in the target company and make significant improvements to it.
Cevian Capital, a Swedish hedge fund company, primarily scans opportunities to acquire significant minority ownership in public companies to advance long-term and sustainable value creation. The firm is known to make targeted investments in businesses that are undervalued, misunderstood, or out of favor with investors but have leading market positions, significant cash flows, and favorable long-term demand dynamics.
Smith & Nephew’s performance has been marked by modest growth in recent years as shares of the company have plunged 38.6% in the past five years. In 2022, Smith & Nephew unveiled a 12-point plan aimed at enhancing its financial performance. The company stated that its goals were to drive strategy for growth, enhance execution, and transform itself with the plan. Fixing orthopedics, raising productivity, and quickening the expansion of sports medicine and wound care were among the actionable things. In November 2023, the company acquired CartiHeal and its novel sports medicine technology, which strengthened the company’s leadership in sports medicine and biological healing.
Per Cevian Capital, Smith & Nephew owns fundamentally sound businesses in structurally growing markets, but the company has not generated shareholder value for many years. The investment firm believes that companies like Smith & Nephew possess the potential to create significant long-term value by improving the operating performance of its business. Cevian Capital also stated that the value-creation potential is typically not reflected in the share prices of companies.
Notable Developments
In June, SNN announced the launch of its new CORIOGRAPH Pre-Operative Planning and Modeling Services. This launch is likely to provide personalized solutions for surgeons and patients across partial and total knee arthroplasty procedures.
In April, SNN announced an exclusive distribution agreement with NAVBIT, a specialized player in surgical technology. This exclusive partnership, unveiled during the Australian Orthopedics Association COE Meeting in Sydney, marks a significant step in expanding its implant business in Australia.
Price Performance
In the past six months, SNN’s shares have plunged 3.2% against the industry’s growth of 0.5%. The S&P 500 increased 17.6% in the same time frame.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
SNN carries a Zacks Rank #4 (Sell) at present.
Some better-ranked stocks in the broader medical space that have announced quarterly results are DaVita (DVA - Free Report) , Ecolab (ECL - Free Report) and Universal Health Services (UHS - Free Report) .
DaVita, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 13.6%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 29.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita’s shares have gained 44% compared with the industry’s 20.4% growth in the past year.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 1.7%.
Ecolab’s shares have gained 33.8% against the industry’s 9.3% decline in the past year.
Universal Health Services has an Earnings ESP of +2.91% and a Zacks Rank of 2, at present. UHS has an estimated earnings growth rate of 30.5% for 2024.
UHS’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 8.12%.
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Smith & Nephew's (SNN) 5% Stake Acquired by Cevian Capital
Smith & Nephew SNATS (SNN - Free Report) is likely to witness operational improvements in the future as Cevian Capital, a Swedish investment firm, purchased a 5% stake in the company. Per the Securities and Exchange Commission disclosure, Cevian Capital now has 5% of voting rights attached to the shares. This purchase makes the investment firm the second-largest shareholder of Smith & Nephew.
Cevian Capital is known to collaborate with the boards and management teams of companies where it buys equity to promote plans that boost the long-term viability, profitability, and competitiveness of those companies. This frequently entails enhancing corporate strategy, organizational design, financial management, corporate governance, operations, and sustainability in general.
More on Cevian Capital and Its Impact as an Activist Investor
An activist investor is an individual or an institutional investor who aims to get seats on the board of directors of the target company to obtain a controlling stake in the business. Activist investors most typically look to uncover perceived hidden value in the target company and make significant improvements to it.
Cevian Capital, a Swedish hedge fund company, primarily scans opportunities to acquire significant minority ownership in public companies to advance long-term and sustainable value creation. The firm is known to make targeted investments in businesses that are undervalued, misunderstood, or out of favor with investors but have leading market positions, significant cash flows, and favorable long-term demand dynamics.
Smith & Nephew’s performance has been marked by modest growth in recent years as shares of the company have plunged 38.6% in the past five years. In 2022, Smith & Nephew unveiled a 12-point plan aimed at enhancing its financial performance. The company stated that its goals were to drive strategy for growth, enhance execution, and transform itself with the plan. Fixing orthopedics, raising productivity, and quickening the expansion of sports medicine and wound care were among the actionable things. In November 2023, the company acquired CartiHeal and its novel sports medicine technology, which strengthened the company’s leadership in sports medicine and biological healing.
Per Cevian Capital, Smith & Nephew owns fundamentally sound businesses in structurally growing markets, but the company has not generated shareholder value for many years. The investment firm believes that companies like Smith & Nephew possess the potential to create significant long-term value by improving the operating performance of its business. Cevian Capital also stated that the value-creation potential is typically not reflected in the share prices of companies.
Notable Developments
In June, SNN announced the launch of its new CORIOGRAPH Pre-Operative Planning and Modeling Services. This launch is likely to provide personalized solutions for surgeons and patients across partial and total knee arthroplasty procedures.
In April, SNN announced an exclusive distribution agreement with NAVBIT, a specialized player in surgical technology. This exclusive partnership, unveiled during the Australian Orthopedics Association COE Meeting in Sydney, marks a significant step in expanding its implant business in Australia.
Price Performance
In the past six months, SNN’s shares have plunged 3.2% against the industry’s growth of 0.5%. The S&P 500 increased 17.6% in the same time frame.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
SNN carries a Zacks Rank #4 (Sell) at present.
Some better-ranked stocks in the broader medical space that have announced quarterly results are DaVita (DVA - Free Report) , Ecolab (ECL - Free Report) and Universal Health Services (UHS - Free Report) .
DaVita, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 13.6%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 29.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita’s shares have gained 44% compared with the industry’s 20.4% growth in the past year.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 1.7%.
Ecolab’s shares have gained 33.8% against the industry’s 9.3% decline in the past year.
Universal Health Services has an Earnings ESP of +2.91% and a Zacks Rank of 2, at present. UHS has an estimated earnings growth rate of 30.5% for 2024.
UHS’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 8.12%.