Will Edwards Lifesciences Stock Recover To Its Pre-Inflation Shock Highs Of $130?

Edwards Lifesciences
EW
(NYSE: EW), a medical technology company specializing in artificial heart valves, currently trades at $76 per share, about 10% lower than the level seen in March 2021, and it can see higher levels over time. EW stock was trading at around $95 in early June 2022, just before the Fed started increasing rates, and is now 20% below that level, compared to 16% gains for the S&P 500 during this period. This underperformance of EW stock can be attributed to its slower-than-expected sales growth for its transcatheter aortic valve replacement business. Also, investors still have concerns about a potential recession despite a steady decline in the inflation rate in response to the Fed’s aggressive rate hike plan.

We note that EW stock has had a Sharpe Ratio of 0.5 since early 2017, close to 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.3 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.