Defibrillators

Sales fell across the board when including Guidant-related sales in last year's first quarter, but did improve in a couple of categories on a sequential basis.

And, if you look at the glass as half full, double-digit falls in drug-eluting stent sales mean that Guidant-related CRM sales now account for the bulk of sales, making the acquisition potentially worthwhile.

And after some unscientific results to end last year, the recently filed 10-K highlighted that cash flow generation was decent.

Based off the cash flow statement, free cash flow looks to have come in at about $1 per share, implying the stock is trading at under 16 times free cash.

That could turn out to be a very favorable multiple if sales trends reverse course and current profitability can be maintained.

On the flipside, if sales continue to fall, then the heavy debt load taken on to acquire Guidant could become even more cumbersome.

Note that interest expense was half of operating income for the quarter.

At current prices, the risk/reward tradeoff appears favorable enough to warrant a full checkup on the stock. And if drug-eluting stent sales recover, Boston Scientific could be able to outperform competitors including Johnson & Johnson (NYSE: JNJ) and Abbott Labs (NYSE: ABT).

Plus, Medtronic (NYSE: MDT) is just getting w...

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