Wright Medical Group (NASDAQ:WMGI) is a global medical device company focused on extremities and biologics. The company had exceeded analysts’ estimates for the past four quarters and EBITDA margins have increased from -5.5% in 4Q15 to 11.7% in 4Q16, on its way towards their 20% margin target by 2019. Unfortunately, the company missed first quarter 2017 earnings as a planned salesforce expansion did not lead to increased sales as quickly as hoped. Underlying metrics remain strong and the company should recover as the year proceeds. In addition, a recent Financial Times article reported on speculation that a larger orthopedic company may be looking to acquire Wright. Given the consolidation in the orthopedic market and CEO Palmisano’s history of selling his prior companies, we would not be surprised if a strategic player recognizes Wright’s intrinsic value sooner than expected.
From Keeley All Cap Value Fund second quarter 2017 shareholder commentary.
