Hello everyone, I have had Medtronic $MDT (-1,1Â %) in my portfolio for a long time and it's just bobbing along. But what is happening now (with announcement) could be a significant turning point.
It's not just that they are taking their diabetes division (MiniMed) public (the announcement was officially published yesterday). This is just the most visible part of a radical strategy that CEO Geoff Martha has been implementing since he took over. He is doing exactly what General Electric has done so successfully - he is filleting the colossus so that the real gems can finally shine.
The MiniMed IPO and the sale of the lame "Respiratory" division (ventilation) are making the portfolio cleaner.
Medtronic is already going on the attack against Intuitiv Surgical with the Hugo system.
Anyone who thinks that Medtronic's Hugo system is only good for "small things" is mistaken. Hugo is modular. While Intuitive Surgical's da Vinci is a solid block, Hugo consists of four flexible individual arms. This is a huge advantage for clinics in terms of logistics and costs. Medtronic can use its market power to put together packages of robotics, pacemakers and suture material that a pure robotics specialist simply cannot match in terms of price. This is the lever that will really cost Intuitive Surgical market share.
The MiniMed spin-off is not about hardware, but about software. The SmartGuard algorithm is the real spearhead. Together with the new Simpler Sync sensor (finally without the hassle of stitching and gluing!), they deliver the complete "artificial pancreas" from a single source. While the competition (Tandem/Dexcom) is always dependent on partners, MiniMed controls the entire system. This is a moat that many still underestimate.
Geoff Martha is now delivering what he promised: He is freeing the growth machines from the ballast of the old divisions.
Medtronic is becoming a highly profitable cash machine for cardiac medicine and robotics (with stable dividends!). And Minimed will become the pure tech bet for all those who believe in automated diabetes cures.
I am delighted that the implementation is actually taking shape. As an idea, you can look at General Electric, for example, and see how the split has led to massively higher individual valuations.
It's getting exciting 🤑🤞🏼
