With a market cap of $5.8B and operating in a field most people prefer not to think about, Teleflex is not a household name. If you’ve heard about it, you’re either a doctor or a very perceptive yet unlucky patient. The company makes and sells single-use medical devices for diagnostic and therapeutic procedures in critical care and surgical applications globally. Think catheters, stents, intraosseous bone access systems and the like.
Investors, too, have been better off not having to deal with Teleflex in recent years. The stock is down more than 70% from its 2021 record high and is trading back to 2015 levels. In other words, it’s been a lost decade for TFX shareholders. On the bright side, the company has a new CEO and a plan to divest part of the business to pay down $800m of debt and repurchase $1B of stock.
We’ve seen enough of these types of restructurings to know that they’re usually beneficial to long-term investors. At a 2027 P/E of 12.5, the stock is also not very expensive to begin with, making the planned buybacks very accretive. And last but not least, the post-2021 decline has actually produced a bullish Elliott Wave setup.
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The weekly chart of Teleflex reveals a simple (a)-(b)-(c) zigzag correction. Wave (b) is a triangle, marked a-b-c-d-e and the five sub-waves of wave (a) are also visible. Triangles precede the final wave of the larger sequence, before the trend changes direction. Here, this final wave is (c), which seems to have ended at $100 per share in January. If this count is correct, the recent recovery to over $130 is likely to continue in the years ahead. While it is too early to talk about a new all-time high, Teleflex stock can at least double to the resistance near $260.
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