Medtronic's Dominance Results in Wide Moat
Few can match the company's pervasive presence in hospitals.
Medtronic’s (MDT) impressive execution and ongoing efforts to take advantage of new value-based opportunities underscore our confidence in the company’s wide economic moat.
Two aspects of the recently reported fiscal third quarter were particularly noteworthy, from our perspective. First, management’s comments regarding the Guardian Connect continuous glucose monitor lead us to believe that Medtronic is ready to put some muscle behind marketing it as a stand-alone product. While the monitor has been available on a stand-alone basis, most of Medtronic’s focus has been on the insulin pumps. Medtronic’s continuous glucose monitor offers individualized predictive alerts and taps into the Big Data analytics of IBM Watson. Though its sensors have trailed those of Dexcom (DXCM) on accuracy, Medtronic has begun competing on other meaningful features and benefits. We see this latest effort as another way Medtronic can leverage its major competitive advantage in diabetes: its data collection and analysis that leads to better predictive algorithms.
Debbie Wang does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.