Smith & Nephew SNATS, Inc. (SNN:NYSE)
Price at Preparation: $24.87 (May 27th, 2024)
What they do
Smith & Nephew SNATS, Inc. (SNN:NYSE) is a portfolio medical technology company engaged in developing, manufacturing, marketing, and selling medical devices and services. It is focused on the repair, regeneration, and replacement of soft and hard tissue. Its segments include Orthopaedics, Sports Medicine & ENT and Advanced Wound Management.
- Orthopaedics: Include a range of hip and knee Implants used to replace diseased, damaged, or worn joints, robotics-assisted and digital enabling technologies and services that help surgeons, and trauma products used to stabilize severe fractures and correct hard tissue deformities.
- Sports Medicine & Ear, Nose and Throat (ENT): Offers advanced products and instruments used to repair or remove soft tissue.
- Advanced Wound Management: Provides a comprehensive set of products to meet broad and complex clinical needs and help healthcare professionals reduce the consequences of wounds.
Welcome to this week’s Theta Bandits: Top Pick Tuesday. We strive to bring you free content, searching the markets to get ahead of what we think could be new potential winners. This week we have turned our attention to the medical sector with SNN (previous medical picks including NVO and PFE).
Outlook
Smith & Nephew SNATS, Inc. (SNN:NYSE) has been on a recovery trajectory since hitting a low of $21.53 USD at the end of 2023. Currently, the stock price is about 30% below its 52-week high of $32.28 USD and significantly below its 2021 highs of approximately $45 USD. Analysts’ 12-month price targets (PT) range from:
- Low: $26.86 USD (+8%)
- Average: $32.07 USD (+28.95%)
- High: $38.13 USD (+53.34%)
This stock offers excellent potential for price appreciation, supplemented by a 2.94% dividend paid semi-annually (last dividend: $0.45 USD per share on May 21st, 2024).
While the stock has strong recovery prospects, remember that market predictions are never 100% accurate. Ensure this trade fits your personal risk profile before proceeding.
Plan
Using the visual aid included below, the following highlights are:
- Blue: 52-week high.
- Red: 52-week low and a potential cut target.
- Green: 12-month PTs (low, avg, high).
- Orange: Support/resistance lines.
- Yellow: Our potential plan targets.
Dividends can inject volatility into a stock and since that has recently been paid, the price action should stabilize and not worry about dividends until the next dividend cycle. The current price is sitting right near a support of $24.75 USD, keep this in mind before entering a position. If the price can keep above this support, that will confirm a valid entry point and look for the next resistance line at $26.01 USD or even target securing a first profit point at $26.86 USD (our low 12-month PT). This becomes a rinse and repeat either secure profit or adjust stop losses as the price moves up through the target areas. Look to the left on the graph to see when previous strong reversals exist and possibly be more strict securing profit with exits at those points.
If the price moves past Target 3, this is breaking both the 52-week high and the 12-month analyst average PT and heading for the bonus Target 4. Information for price action at those levels will be pre-June 2023, so the information will need to be looked at again with a longer timeframe. Moving to those levels should be a bonus and only pursued with profits from the trade.
If the price falls to the “cut” support line marked in red, this would indicate the trade has gone the wrong way through multiple support levels and to potentially time to cut losses and move to the next trade idea as the thesis will be broken.
For more content consider our Theta Bandits Discord community, a hub for traders to ask questions, share ideas and strategies for this and other tickers daily. Traders in this community have explored similar positions using methods discussed here and in previous Top Pick Tuesdays.
RISKS
The goal is to grow capital by securing profits and limiting losses. Make sure to plan your trade within your risk tolerance, allowing time for success while updating limits and exit points to mitigate risk.
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Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.
