Should You Expect CONMED (CNMD) to Grow Above Average and Expand its Margin?

ClearBridge Investments, an investment management company, released its “ClearBridge SMID Cap Growth Strategy” first quarter 2024 investor letter. A copy of the letter can be downloaded here. Strong corporate earnings, enthusiasm over AI, and anticipation of interest rate cuts boosted the equity market rally in the first quarter. The growth stocks outperformed their value counterparts during the quarter as benchmark Russell 2500 Growth Index returning 8.51% versus the 6.07% return of the Russell 2500 Value Index. Against this backdrop, the strategy underperformed its Russell 2500 Growth Index benchmark in the quarter. Industrials and healthcare sectors were the leading contributors while the real estate and IT sectors detracted. In addition, please check the fund’s top five holdings to know its best picks in 2024.

ClearBridge SMID Cap Growth Strategy highlighted stocks like CONMED Corporation (NYSE:CNMD), in the first quarter 2024 investor letter. CONMED Corporation (NYSE:CNMD) is a medical technology company. The one-month return of CONMED Corporation (NYSE:CNMD) was -8.56%, and its shares lost 48.85% of their value over the last 52 weeks. On June 24, 2024, CONMED Corporation (NYSE:CNMD) stock closed at $68.14 per share with a market capitalization of $2.099 billion.

ClearBridge SMID Cap Growth Strategy stated the following regarding CONMED Corporation (NYSE:CNMD) in its first quarter 2024 investor letter:

"We also added a new position in CONMED Corporation (NYSE:CNMD), also in the health care sector, which is a medical device provider focusing on the orthopedic and general surgery categories. We believe the business is balanced globally with over 80% of revenues coming from single-use products and a large breadth of established stock keeping units. With a handful of particularly high-growth products that remain early in their penetration and competitively differentiated, we believe CONMED can drive above-sector-average growth while seeing steady margin expansion from mix shifts."

Closeup portrait of a surgeon wearing a surgical mask and gown while holding a surgical device.

CONMED Corporation (NYSE:CNMD) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held CONMED Corporation (NYSE:CNMD) at the end of the first quarter which was 23 in the previous quarter. Total sales of CONMED Corporation (NYSE:CNMD) for the first quarter of 2024 reached $312.3 million, marking a 5.7% year-over-year increase as reported and a 5.9% increase in constant currency. While we acknowledge the potential of CONMED Corporation (NYSE:CNMD) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed CONMED Corporation (NYSE:CNMD) in another article and shared the list of worst-performing stocks insiders are buying in 2024. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.