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EW Insiders are Steady Sellers

Edwards Lifesciences, LLC, Recalls SAPIEN 3 Ultra Delivery System Due to Burst Balloons During Surgery, Which May Result in Vascular Injury, Bleeding, or Surgical Intervention

The FDA has identified this as a Class I recall, the most serious type of recall. Use of these devices may cause serious injuries or death. https://www.fda.gov/medical-devices/medical-device-recalls/edwards-lifesciences-llc-recalls-sapien-3-ultra-delivery-system-due-burst-balloons-during-surgery

Insiders have been steady sellers of this highflyer for some time but now they really have a reason to unload. A cardiac surgeon I know that has been early on with the Sapien valves was candid with his opinion. “not sure the extent of the problem but they likely will recover and continue to rally if their earnings remain immune. This was a balloon problem not really with the device itself, should be an easy fix. FDA clearance for low risk really boosted the whole industry despite my clinical reservations. Cardiology is a powerful lobby.”

EW is a rich stock but it sounds like this one could be a buy on a dip if the market continues to reward growth the way it has. It’s not like this is a discretionary item.  I read somewhere the cost of the procedure is $80-90,000.  That’s probably even low and I think Edwards’ take is at least $30k. It’s valued at $197 with a 3% 10 yr treasury and a 17% growth rate. With a 2% treasury, the value goes to $257.

Buyer beware and all that stuff. All investments involve risk and they seem to have more risk these days with Trump trying to bring manufacturing back to the USA and the trade war. None the less I don’t see any politician surviving the ire of the aging baby boomers if they start messing with health care benefits. I wish I could say this was a recommendation but I’m old fashioned.  They pay no dividend and for a $44 billion market cap company, a net cash balance of $330 million seems miserly. Where is the shareholder’s money?

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