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IHI’s Large-Cap Stocks Continue to Impress

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Reviewing IHI’s large-caps

On May 12, 2016, the large-capitalization stocks of the iShares U.S. Medical Devices ETF (IHI) rose by 0.2% compared to the SPDR S&P 500 ETF’s (SPY) stagnant position. IHI’s large-caps have been impressive in their performances and have remained positive in May 2016.

On May 12, 2016, IHI held 13 large-cap stocks in its portfolio. Among them, 11 stocks rose while two stocks fell from their previous closing prices. IHI’s large-cap stocks account for 75.2% of its portfolio.

The above graph reflects the performances of SPY, IHI, and IHI’s large-cap stocks. From the beginning of May until May 12, 2016, IHI’s large-caps rose by 1.7% compared to IHI’s 1.1% rise and SPY’s 0.1% rise. On a year-to-date (or YTD) basis, IHI’s large-caps have risen by a collective 12.8%.

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Which stocks within IHI are outperforming?

On a YTD basis within IHI’s large-cap stocks, Edwards Lifesciences (EW) has outperformed other stocks with a return of 33.7%, followed by St. Jude Medical (STJ) with a return of 22.8%. The top two underperforming stocks are Abbott Laboratories (ABT), which has fallen by 15.4% so far this year, and Waters Corporation (WAT), which has risen by only 0.3%.

Edwards Lifesciences closed at $105.59 on May 12, 2016, and it was trading below its 20-day moving average. The 52-week range of the stock was $62.53–$112. On May 12, 2016, the stock was trading at a 2016 forward price-to-earnings multiple of ~38.3x.

Edwards Lifesciences has a book value of $10.85 per share. At its current price, the stock is trading at a price-to-book value of ~9.7x per share. Edwards Lifesciences has a weight of ~4.3% in IHI’s portfolio.

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