Top Oppenheimer Health Care Stocks to Buy for 2014

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Health care has been a top sector for investors this year. The research team at Oppenheimer continues to believe that health care remains well positioned to deliver further market-topping returns in 2014. Earnings revisions for the sector remain positive, placing it in an ideal position to benefit from any pullback in the performance of cyclicals. The top names to buy also provide a positive fundamental backdrop for the sector.

Compliance with the Affordable Care Act, the associated medical device tax, increasing provider consolidation and tepid industry pricing power are all issues the industry has been grappling with over the past few years. The good news is procedure volumes are growing and an aging population of baby boomers will require more and more care. Here are the top Oppenheimer names to buy and own for continued gains in the sector.

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Abbott Laboratories (ABT) gives investors everything from top pharmaceutical products to medical devices. As one of the top branded generic companies, Abbott has the ability to continue to add top selling drugs to its portfolio as patents on branded names expire. Investors are paid a 2.3% dividend. The Thomson/First Call price target for the stock is $40. Abbott closed Tuesday at $38.71.

Boston Scientific Corp. (BSX) has struggled for years and finally may be putting all the pieces together for investors. Even with sales in flux, Boston Scientific's stock has more than doubled this year as the firm mitigated hits to its cardiac rhythm management branch while bolstering its investments in emerging technologies. The consensus price target for the stock is $12. The company closed Tuesday at $11.96.

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Cyberonics Inc. (CYBX) engages in the design, development, marketing and sale of implantable medical devices to hospitals and ambulatory surgery centers. The company offers vagus nerve stimulation therapy system that provides neuromodulation therapy for the treatment of refractory epilepsy and treatment-resistant depression. This is becoming an ever larger health care business each year. The consensus price target for the stock is $60. Cyberonics closed Tuesday at $61.92.

Intuitive Surgical Inc. (ISRG) has been one of the top growth names over the past five years. Robotic surgery has gained a huge following here and around the world. The problem has been some overselling of the safety of the procedures. Having sold off almost $200 since the stock peaked in January, investors may have a much better entry point. The consensus price target is posted at $425. Intuitive closed Tuesday at $394.58.

Medtronic Inc. (MDT) reported higher earnings Tuesday that were above analysts' estimates. The maker of pacemakers, spinal products, insulin pumps and other medical devices said it earned $902 million, or $0.89 a share, in the second quarter ended Oct. 25. That compared with $646 million, or $0.63 a share, a year ago. Revenue rose 2.4% to $4.2 billion. Investors are paid a 1.9% dividend. The consensus price target for this industry leader is $60. Medtronic closed yesterday at $57.94.

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NuVasive Inc. (NUVA) specializes in products for the surgical treatment of spine disorders. The company's Maximum Access Surgery platform allows surgeons to perform complicated minimally invasive surgery on the spine. The company reported very strong third-quarter earnings earlier this month. The consensus price target for this hot name is $34, and NuVasive closed Tuesday at $32.64.

St. Jude Medical Inc. (STJ) is a favorite medical device maker of CNBC's Jim Cramer. Despite some recent downgrades on a valuation basis, the stock has continued to trade well. Investors are paid a 1.7% dividend. The consensus price target is placed at $60, and St. Jude closed Tuesday at $56.93.

With the markets racing ever higher, investors may want to look at growth names that have a more defensive posture. Eventually, despite the crowing of constant market bulls, we will see a decline or even a full correction. Defensive growth names will fare far better than momentum darlings.

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