Medical Device Stock Burns Short Sellers

Wright Medical posted strong quarterly sales

by Josh Selway

Published on Aug 9, 2018 at 9:58 AM

Shares of Wright Medical Group Inc (NASDAQ:WMGI) -- a medical device company providing products such as bone fixation devices and joint implants -- are trading up 7.6% today at $28.30, putting them in territory not seen since last September, thanks to a strong earnings release. Wright Medical posted surprising sales growth and raised its full-year guidance, with CEO Robert Palmisano calling out an impressive performance from the company's shoulder business in particular.

This is the second straight quarter WMGI stock has jumped higher after earnings, with the shares soaring adding more than 12% the day after reporting back in May. Longer term, the trading action for the equity has been choppy since it began trading on the Nasdaq back in 2011. It rallied to the $30 mark that same year, but didn't revisit that round-number level until peaking at $31.53 back in April 2017, and the stock again topped out there last September.

Meanwhile, a few analysts have since upped their price targets on the security, including Guggenheim, which set the highest mark of the bunch at $35. Most of those covering WMGI were already bullish, with eight of the 11 tracking the shares sporting "strong buy" recommendations. The average 12-month price target, meanwhile, is $31.42.

On the other hand, a number of short sellers have targeted the healthcare stock. Short interest increased 15.8% in the last two reporting periods, and now represents almost 17% of the total float. Short-covering tailwinds could help fuel more upside for the equity going forward.

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