We have noted ICU Medical's positive performance during today's afternoon trading session, during which it logged a 12.0% outperformance of the S&P 500. At its current price of $206.42, the company is now trading in range of its average target price of $205.0, which calls into question its ability to keep moving higher. Analysts have given the Medical Instruments & Supplies stock target prices ranging from $200.0 to $210.0 dollars per share, with an average rating of buy.
We can use ICU Medical's short interest as a proxy for determining general market sentiment regarding the stock. The short interest is the percentage of the share float that represents short positions, meaning that the investor believes the stock will decline in the future. Since ICUI's short interest is 8.1%, the market sentiment is mixed on this stock.
Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.
One way to get an idea of the market sentiment on a stock is to check its rate of institutional ownership. In the case of ICU Medical, institutional investors own 94.4% of the shares. This would indicate a positive sentiment towards the stock among institutions. What does this really tell us?
Institutional investors such as hedge funds, investment firms, and wealth managers devote significant resources to identifying good investments. If they have decided to invest in ICUI, it probably means they believe it is a solid investment choice. But it could also mean they are buying up shares in an effort to acquire the company or get seats on the board of directors. Also bear in mind that institutions are fallible (just maybe not quite as fallible as the average retail investor), so they may simply be wrong when they think they've found a good stock.
Overall, there is mixed market sentiment on ICU Medical because its an analyst consensus of little upside potential, a buy rating, an above average percentage of its shares sold short, and a significant number of institutional investors. Warren Buffett famously said that in the short term, markets are voting mechanisms, but in the long term, they are weighing mechanisms. This means that long term investors should be aware of a stock's fundamentals before committing.
Buffett was one of the fist investors to focus on free cash flow as a yardstick for a company's health. Here are ICUI's recent cash flows:
| Date Reported | Cash Flow from Operations ($ k) | Capital expenditures ($ k) | Free Cashflow ($ k) | YoY Growth (%) |
|---|---|---|---|---|
| 2022-12-31 | -62,129 | -99,329 | -161,458 | -186.63 |
| 2021-12-31 | 267,538 | -81,169 | 186,369 | 52.31 |
| 2020-12-31 | 222,752 | -100,390 | 122,362 | 3068.51 |
| 2019-12-31 | 101,918 | -106,040 | -4,122 | n/a |
