Medtronic (MDT) Soars 9.68% on Diabetes Division Spin-Off

Medtronic (MDT) shares rose 0.53% intraday, reaching their highest level since April 2025, marking a 13-day winning streak with a 9.68% gain over the past 13 days.

The strategy of buying MDT shares after they reached a recent high and holding for one week resulted in poor performance over the past five years. The strategy yielded an excess return of -45.55% and a CAGR of -5.65%, significantly underperforming the benchmark return of 27.53%. Additionally, the strategy had a high maximum drawdown of -38.68% and a Sharpe ratio of -0.25, indicating significant risk and negative returns.

The recent surge in Medtronic's stock price can be attributed to the company's strategic decision to separate its diabetes division into a new standalone company called MiniMed. This move is aimed at enhancing the value of its diabetes business and is expected to be completed within 18 months, subject to customary conditions and legal requirements.

This strategic decision reflects Medtronic's commitment to focusing on its core competencies and optimizing the performance of its various business segments. By creating a separate entity for its diabetes division, Medtronic aims to provide more targeted solutions and better serve the needs of patients and healthcare providers in this critical area.

The separation of the diabetes division is part of a broader strategy to streamline operations and drive growth. This move is expected to create a more agile and focused organization, better positioned to innovate and compete in the rapidly evolving healthcare landscape. The new standalone company, MiniMed, will have the flexibility to pursue its own strategic initiatives and partnerships, potentially leading to new opportunities for growth and expansion.

Overall, the decision to separate the diabetes division is a significant step for Medtronic, demonstrating its commitment to long-term growth and value creation. Investors have responded positively to this news, as evidenced by the recent surge in the company's stock price. As the separation process progresses, it will be important to monitor the performance of both Medtronic and MiniMed to assess the impact of this strategic move on their respective businesses and the broader healthcare industry.