Google GOOG (NYSE) recently hired Bell Canada’s executive, Daniel Pichette, to become its new CFO. Google’s search to replace its former CFO, George Reyes, took ten months, a long time to replace this position. Joseph Wiesenthal of PaidContent.org wrote a short but incisive piece on the process, entitled Google’s CFO Search: Why’d it take so long? The piece is worth a quick read.

Our other special focus this week is on orthopedics. We spoke to analyst Ben Andrew, of William Blair and Company, who spoke to us a little bit about the area he covers in this spaces: the spine.

Andrew considers the spine one of the faster growing segments in health care. Here’s why:

Mr. Andrew: With the aging of the population, roughly 50% of the people over the age of 50 have low back pain and actually go to the doctor looking to get treatment for that at some point. Many of them are looking for an intervention that can alleviate their pain quickly as opposed to the alternative, which would be physical rehabilitation, exercise and stretching, and other more traditional care.

We also talked with analyst John Putnam, who also focuses on the spine space, about some of these surgeries, and their appeal:

Mr. Putnam: Traditionally, if you had back problems and you had to have a spine fusion, most of the time the surgery has been either from the front or from the back, but it involved major incisions, so if it was done from the front, all the organs have to be moved to be able to get to the spine. So it’s really a pretty invasive surgery. The minimally invasive surgery that we are talking about here is the access through the side (it’s called lateral). This has really revolutionized spine surgery to a great extent. We are very early in the growth of this market. It’s just a better way of doing things. There is less trauma to the patient, less blood loss, quicker recovery, people are up the next day instead of being in the hospital for five days, or they are discharged in just a couple of days and, as I said, the recovery is a lot faster.

For the full interview with Mr. Andrew, including a complete overview of this space and stock picks, click here.

For more on minimally invasive spinal surgery, and the opportunity it presents to investors, click here.

As the American Automobile Industry flirts with a serious financial contraction or possibly worse, General Motors GM (NYSE) continues to lead the pack downward. Earlier today Goldman Sachs listed GM as a sell. According to a story today by Kevin Krolicki of Reuters,

Shares of General Motors Corp hit their lowest level since 1955 and dragged down the auto sector on Thursday after Goldman Sachs cut the struggling U.S. industry’s largest manufacturer to a “sell” rating and warned it would have to raise capital.     

… With the Thursday price fall, GM’s market cap fell to less than $6.5 billion. The company has the smallest market cap in the Dow Jones industrial average .DJI, of which it has been a component since 1925.  

  As I have been discussing for some time now, Richard Wagoner, GM’s CEO, remains on the hot seat. He was recently interviewed by Smart Money Magazine’s, Reshma Kapadia. I have excerpted below two of the interview’s Q and A’s to give you a flavor for Wagoner’s problems and how he views them. 

A lot of people are talking about a U.S. recession. Can the great American automaker still turn things around?   

Sure. There are a number of things that will play out over the next couple of years that should improve our earnings. When we complete the 2007 labor agreement, we will get $4 billion to $5 billion in savings, a half billion when our supplier Delphi gets out of bankruptcy, and if the U.S. industry gets back to average sales, that will be $1 billion to $1.5 billion, conservatively. We don’t have the profitability we want, but we are improving our cash flow. So even in a very difficult U.S. environment, help is on its way. But we’re not waiting for help to get here. We are coming up with other ways to improve our cost structure, including a buyout offer for U.S. hourly employees.

What do you say to those shareholders who are fed up with the stock price?I’m a big shareholder myself; I share the frustration.

I’m confident that as the market psychology turns and assumes some of these issues are behind us, we’ll be well positioned. I talk to major investors regularly, and of course they would love to see a higher stock price. But they say, “Keep going and do the right stuff for the future.” So that’s what we are trying to do.   

The real question I am thinking — is it now too late to make a change at the top of GM right now as gas, inflation, the economy, SUVs, Hummers and trucks all conspire to complicate the problems facing the car manufacturer?   

It was reported this morning that the pending merger between Anheuser-Busch Co. (BUD) and InBev NV (INB) might fall through. Anheuser-Busch is gravitating towards rejecting the offer in favor of attempting to lower costs and sell off divisions.

For an overview of the Beverages space, including an analysis of Anheuser-Busch in the long term, read TWST’s interview with Analyst Matthew Reilly of Morningstar, Inc. 

For more an idea of what exactly Anheuser-Busch is turning down, take a look at TWST’s exclusive interview with John Brock, former CEO of InBev.

Sir Stuart Rose, the CEO of British retailer, Marks and Spencer who despite a great deal of opposition took on the role of Executive Chairman of the firm back in March (see blog) finds himself back in the news again. According to a story by Julia Finch for the Guardian, 

Marks and Spencer shareholders are being urged to vote against the retailer’s chairman Sir Stuart Rose at next month’s annual meeting in protest at his promotion from chief executive.Corporate governance research group Pensions and Investment Research Consultants (PIRC) has advised its clients - who include many local authority pension funds and faith-based investors - to show their disapproval of Rose’s new role. Commenting on the PIRC voting guidance an M&S spokesman said: “They are entitled to their views. We have made our position clear.” … The Association of British Insurers, whose members include many of M&S’s biggest shareholders, has stopped short of recommending a vote against Rose. But in its voting guidance to members it gave the company an “amber top” - which urges shareholders to consider the issues carefully before voting.  

Keep a close eye on the impending vote results. 

Fortune Magazine just did an article speculating on who might succeed Steve Jobs should he resign or retire. I point out the artice not becuase of the suggestions but rather because of the incredible bench of talent Apple appears to have waiting in the wings. While no one may be able to replace Jobs, the Forbes list of potential in-house successors is really impressive. Check it out.

On our restaurants panel in January, analysts talked about how 2007 was a tough year for casual dining. The day before our panel the company, according to our analysts, Darden Restaurants (DRI) “really got slammed”. However, 2 of the 3 analysts on the panel said that this was a good quality company, and that they were sticking to it for the long term.

Hopefully you followed their advice, as today Bloomberg reports:

Darden Restaurants Inc. (DRI:US) advanced the most since May 27, gaining 4.3 percent to $32.95. The owner of the Olive Garden and Red Lobster chains reported fourth-quarter earnings before some items of 78 cents a share, more than analysts’ 75-cent estimate. The company also boosted its dividend 11 percent.

To take a look at our restaurant panel, and see what else these analyst picked and predicted for 2008, click here.

JUNE 25 - STOCKHOLM, SWEDEN- Ford-owned Volvo Cars Wednesday said it has given layoff notices to 1,200 employees in Sweden as part of efforts to reduce costs by around 4 billion kronor (US$662 million).

Where is the Auto Industry going?

Read TWST’s exclusive interview with analyst Efraim Levy of Standard and Poor’s U.S. Equity Group for a complete overview of the Automotive Sector.

Quality Systems, Inc. QSII (NASDAQ), the software firm designed to automate medical and dental practices, announced the unexpected resignation of its long-time CEO and president, Louis Siverman. Silverman was orginally appointed to his position at the firm back on July 31, 2000. Silverman joined Quality Systems from the outside. Prior to his appointment, he was the Chief Operations Officer of CorVel Corporation, a publicly traded national managed care services and technology firm. Under Silverman, Quality Systems has thrived. When he first came aboard the company stock was trading below $5 per share. Today the stock trades at approximately $30 per share. The company’s last quarter was quite successful and demonstrated conmtinue revenue growth.

Quality Systems in making the resignation announcement, indicated the firm planned to begin its search for Silverman’s replacement immediately. Silverman is only 49 years of age. Why is he leaving the firm now, especially when all indicators are pointing in a positive direction? There is really very little explanation behind the announcement. It may be simple or may not. Make sure you keep a close eye on the firm as we move throught the summer months. Silverman’s resignation takes place officially on August 16, 2008. The company hopes to have a candidate to replace Silverman by the time his resignation goes into effect.

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