Investment Q&A

Q: I seek your comments and perspective on iShares U.S. Medical Devices ETF - IHI. I have held IHI in a taxable account for a decade and have a taxable gain. However, it is now five years that the ETF has experienced significant stagnation. Total return over five years is negative. I am familiar with the products and services of major holdings such as Abbott Laboratories (ABT), Thermo Fisher Scientific (TMO), and Medtronic (MDT). But these companies have faced considerable headwinds, leading to consistent underperformance relative to the broader healthcare sector and the S&P 500.
I am weighing an exit against the following factors:
- Fundamental Quality: The underlying companies seem to possess moats and, theoretically, remain excellent businesses. Your thoughts?
- Macro Tailwinds: Worldwide demographic shifts and an aging population seem to provide a long-term structural advantage for the medical device industry. Your opinion?
- Timing: I am concerned about cashing out just before recovery or "take-off" for high-quality names held in the ETF. ( I seem skilled in selling only to see shares increase in valuations by 25% or more).
Given the current technical and fundamental landscape, in your opinion, is a holding period of 12 to 18 months likely to reward continued patience? Does the "thesis/technical divergence" we’ve seen in these large-cap medical device names suggest a turnaround is imminent, or is the opportunity cost of holding IHI still too high compared to other growth or value catalysts in the market?
I look forward to your insights on whether the narrative justifies remaining patient with this ETF.
:ao:

Q: In a recent article that I read, the focus was on filtering “companies with expected ROE expansion driven by improving margins and total asset turnover, not financial engineering.”

Among those at the top of his list, the one that interested me was MDT.

- Do you agree that MDT should see favourable ROE going forward?

- Any concerns about valuation or competition?

- Would you agree that the requirement for MDT's devices would be more resilient during recessionary times compared to other types of surgeries?

Q: Could have I an update on your views on Medtronic’s and Qualcomm. Its hold in a RRSP. Would you suggest 1-2 companies for each one with better or same risk profile you would suggest to switch for if you think that’s a good idea .

Q: Bloomberg Headline-- Medtronic Unit Raises $560 Million in US IPO Priced Below Range.
Is it the spinoff unit that investors are not interested in or MDT as a company?
I thought MDT had positive momentum but it looks otherwise. The price today is lower than when we bought in 2020. We were holding on thinking that the firm would harness AI. Do you see any evidence that they are? Or that they could, and improved their performance? Would you hold on or let go? Many thanks for your views

Q: Hi 5i,

What would be your top three picks today in the health care equipment sector? US or Canada. Are they buys today and what would be a good entry point. Please provide a short description as to why they are top picks.

If SIS is not part of the list, can you provide your opinion on this company as an investment for 5 year hold.

Thanks for your help.

Q: I am building a diversified portfolio of healthcare stocks. I own JNJ, AMGN, MDT, CVS and MRNA. These are 2.9%, 3.8%, 2.5%, 4% and 0.5% of my portfolio respectively. Is this a high quality portfolio? Would you recommend any changes?

Q: Hi there,

MDT seems to be moving up after a long time. Given their financials now and in the future, along with any other considerations, do you think the stock price will continue its rise? Is it undervalued at this point given forecasts for next 12-24 months?

Thanks.








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Q: I am mostly content with my health care stocks with the exception of MDT. It has been essentially flat since about 2016 except for the dividend. It did peak around 2022 but has fallen down to previous levels.
What do you think of the longer term for MDT?
Would you make any other changes for slow but reliable growth and higher end of dividends.
As always, thank you for the great service.

Q: Any news on MDT today to cause a 3.7% jump? Thanks a lot.

Q: There was an article in the Globe and Mail today by David Rosenberg about the aging population and he suggested health care related investments such as health care REITS, pharma, devices, and services. What do you think of this idea and can you give me a few recommendations in canada and the US for each of the 4 categories (health reits, pharma, devices, sefrvices)? A mix of ETFS and individual stocks would be great.

Q: This is in response to Dean's question about the tax treatment of Irish companies like MDT. I hold MDT in a non-registered account and the withholding taxes can be claimed back against my Canadian taxes. The MDT withholding taxes are reported on the T5 as foreign dividend income. In the past, I learned the hard way that taxes are deducted from dividends received from non-US foreign companies held inside an RRSP. I don’t have any knowledge of tax treaties, but that's my experience.

Q: Hello 5i,
With regards to MDT & other Irish Domoniced companies that trade on the USA markets such as TT, CAN, ETN, AON, etc.… My broker withheld 25% on all dividend payments in 2024 even though the shares were held in a RRSP. I did well with MDT (Option Premium+Div-Net of Tax, Capital Appreciation) and at some point, I would like to own for dividends MDT or any of the other Irish Domoniced companies that trade on the USA markets. I reached out to my broker since there is a tax treaty with Canada / Irland and completed all recommended documents; the broker continued to deduced 25% of all dividends paid. My question is before I pay the $500 global tax collection or pay a 3rd party for advice would you happen to know or perhaps a reader might know should the Dividend Taxes 25% be taken even in RRSP’s on all Irish Domoniced companies? The net tax so far was ~$3.5K USD so it’s probably enough to seek other avenues to collect the Dividend Tax funds. The simple answer is to seek accounting advice which I certainly will be as an accountant my self this will be a very specialize question that will need an opinion issued.
investorrelations.medtronic.com/opportunities-obtain-irish-dividend-withholding-tax-dwt-exemption
stockanalysis.com/list/irish-stocks-us/

Q: Who are competitors of STRYKER MEDTRONICS Which do you prefer ? RAK

Q: Hi Peter

I have been holding onto this stock on the assumption that AI would soon enable MDT to market or otherwise exploit their massive amount of product research data and information. Am I too optimistic ? I'd very much appreciate any insights you may have on this, and whether you think its worthwhile to hang on because of this thesis, or move on to a "growthier" stock, such as ISRG.

My other question is about Neo Financial. I see that Tobias Lutke and others have contributed in the second (?) round of financing, which to me means that Neo is quite promising. Do you have any info from your sources on Neo's disruption potential, when an IPO could be expected, etc. ?

Thank you kindly.

Ps. We benefitted alot today from the jump in price of shopify, thanks to you.

Q: Could you please review the ratios as I am interested to know what has brought the stock up about 10% recently. Thanks

Q: Hi 5i, I have held Medtronic for just over 3 years and am down 30%. Do you think it's worth holding another year or two (as do a number of the analysts) or should I cut bait and redeploy the funds into LLY? Other suggestions are welcome. Do you feel Intuitive Surgical is overvalued or a good long term call? Thanks!

Q: How would you rate ILMN overall since 2024? Is it still a takeover target in your estimation and who would be the top ones that would make most sense to acquire ILMN?

Q: You replied to my recent question about cdn companies paying us dividends, I would like same 5i stock screener in us companies. Your criteria was us dividends, top 25 with the largest market capitalization, 12 month trailing dividend yield, 5 yr historical dividend growth rate and anything else you may add, basically buy and forget.

Q: Good morning,
Wanting to sell Medtronic to realize a tax loss benefit, would Stryker be a good proxy to hold in the interim? Is there a better-aligned alternative?
Thank you as always...

Q: Hello
Could you comment on MDT earnings?
Sounds like they might be turning the corner with new growth forecasted?
Thank you
Stephane