great chart

Stryker's stock has fallen 47%, to $40, from its peak. It could rise to the mid-$50s as health-care spending rebounds. Morningstar pegs fair value at $72.

10

What's the outlook for this $40 stock?
Last Friday [Dec. 19], they brought their numbers down for the fourth quarter. They didn't provide any 2009 guidance. They blamed the med-surg piece of the business, which is like Hill-Rom, and didn't say anything about orthopedics. The Street brought numbers down for 2009, but kept or expanded its margin forecast so they could keep estimated earnings looking OK. Our price target is in the low 30s. We base that on rival Zimmer Holdings ' [ZMH] multiple. Our number is $2.95 for '09. If you put a nine-times multiple on that, you get about 30.

“Unusual call buying in the front month (January calls) suggests shares of Stryker [SYK] could go to about $45,” says Najarian. “Currently it’s trading at about half it’s 52-week high.”

21%

Stryker Not Worth Chasing: David Peltier, portfolio manager for TheStreet.com Value Investor newsletter, advises against buying shares of medical device maker Stryker at these levels, despite the firm's top-line growth and the overall aging of America.
Click here to watch the video.

PE of 20, a PEG of 1.10, and it pays a yield of 0.6%.

Three firms that he finds particularly attractive include Beckman Coulter (BEC), Stryker (SYK) and Medtronic (MDT).

Also look at Zimmer (ZMH) and Stryker (SYK) as boomer plays. But they’re not quick trades. These are the kinds of stocks you buy and hold.