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Orthofix Medical rebounds after CMS reimbursement reversal, fund highlights
Rewey Asset Management said the company cut 2026 revenue guidance after a May CMS reimbursement reduction, then called the July 1 reversal a net positive for Orthofix.
Rewey Asset Management highlighted Orthofix Medical Inc. in its Q2 2026 "RAM Smid Composite" investor letter, saying the shares looked better after the Centers for Medicare and Medicaid Services reversed a reimbursement change affecting non-invasive bone growth stimulator devices.
According to the letter, Orthofix shares fell after a May 21 announcement that CMS had lowered reimbursement for the devices, prompting Orthofix to reduce its 2026 revenue guidance by $5 million and withdraw prior 3-year targets. The fund also described the earlier move as a disappointment, but said it was not driven by company-specific issues.
The firm pointed to a CMS reversal on July 1, saying the code change was fully reversed, which it characterized as a net positive for Orthofix. Orthofix closed at $11.02 per share on July 22, 2026, and the fund noted the stock had returned 27.03% over one month and gained 4.14% over the past 52 weeks.
In the same letter, Rewey said the composite rose 20.06% in Q2 2026 versus 18.50% for the Russell 2500 Value Total Return Index, and it attributed the results to a continued rotation toward undervalued small and smid cap stocks. It also cited IPO activity of $104 billion across 48 deals during the period.