Berko: Medtronic, si or no? He’s asking for a friend

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Malcolm Berko addresses questions about stocks. Reach him at P.O. Box 8303, Largo, FL 33775 or mjberko@yahoo.com.

Dear Mr. Berko: I’m writing for a 46-year-old friend of mine who escaped Cuba and came to the U.S. in 1981. I told him to write to you, and he did so in Spanish (he doesn’t speak English) to ask what to do with the 319 shares of Medtronic PLC stock he inherited. Your response — “Write me in English and I’ll answer your question” — was insulting and racist. My friend has been here for 36 years and has worked every day. This is important to him, and your insensitive, bigoted response proves that you and your column are xenophobic and full of hate. You probably voted for Donald Trump. Disgusting racists like you make me sick. I’ll never read your column again.

— P.L., Miami

Dear P.L.: Wow! You really got your dandruff up. However, if your friend came here 36 years ago at age 10, why hasn’t he learned to communicate in English?

Several times a year, I get letters written in Spanish. But because I’m not fluent in Spanish, I always ask that they rewrite their letters in English. My response always begins with the adverb “Please,” and I say, “I need your question to be crystal clear so I can give you the best possible answer.” But you insist on jumping to conclusions, which is so common among oversensitive, emotional rants like you. I’m tired of tolerating the intolerance that people like you have for our culture.

Among the most defining elements of a nation’s culture is its language. Our culture is defined by the language of Jefferson, Adams, Franklin and Madison — Americans who wrote the Declaration of Independence, the Constitution and the Bill of Rights. This language is dear to me, as it is to 300 million other Americans. And if you can demand that I respond to your friend in Spanish, why won’t you allow me the right to ask that your friend write to me in English? Your illogical response begins with your misguided sense of entitlement, which has taken a quantum leap into extremism. Is it possible that you’re the racist? Because I know nothing of your friend’s needs and objectives, I’ll assume that he’s a long-term investor.

Medtronic (MDT-$79) is a conservative, superfine long-term investment. MDT is the world’s largest manufacturer of implantable medical devices and generates revenues from over 120 countries. I’d tell your friend (if I spoke Spanish) to keep his shares.

MDT, formerly home-ported in Miami, moved its headquarters to Ireland for tax purposes several years ago. The company has a strong balance sheet, excellent cash flow and impressive net profit margins of 26 percent. Thirty-seven percent of revenues derive from its prestigious cardiac division, and 63 percent derive from its renowned restorative therapies group. Restorative therapies comprise spinal and neural modulation plus diabetes and surgical technologies. MDT has 1,100 global patents and 91,000 employees.

Management expects revenues to reach $31.2 billion this year, which would be a 9 percent increase over 2016. That would also be an impressive 500 percent increase from the $6 billion in sales MDT posted in 2001. And as revenues have continued to rise each year, earnings also have risen annually, from $1.18 a share in 2001 to potentially $5.92 this year. That would also be a 500 percent increase. Not to be left behind, the board has increased the dividend each year, from 22 cents a share in 2001 to $1.84; that’s a sevenfold increase. Today’s dividend yields 2.3 percent. Citigroup, Merrill Lynch, Value Line, Thomson Reuters, S&P Capital IQ, Vanguard, T. Rowe Price and BlackRock are bullish on MDT, which is certainly reflected by their combined ownership of over 500 million shares.

Tell your friend to contact the person whose name I’ve given you, who’s a stockbroker at one of the biggest firms in South Florida. I’ve known him for 31 years. He is Cuban, speaks Spanish and has been around the block a few times. He’s a good cookie. I trust him. And he shares my opinion about MDT. I don’t know much about his skills as a stock picker — he prefers to sell stocks researched by his firm — but they can communicate together without you as an interpreter.

Thanks for writing for your friend.


Malcolm Berko addresses questions about stocks. Reach him at P.O. Box 8303, Largo, FL 33775 or mjberko@yahoo.com.