3 Top Stocks From the Booming US Medical Products Industry
The U.S. Medical Products industry has turned 2018 into ‘the year of inventions’.
With a series of developments like the human-brain pacemaker, electronic skin that displays vital signs of the body, needle-free injections and many more, the medical fraternity has been in the limelight through the year.
Interestingly, the Medical Products industry has returned 21%, compared with the broader Medical industry’s rise of 9.1% and the S&P 500 index’s growth of 16.4%. Additionally, California-based Health Access validates that the U.S. healthcare industry is currently valued at $2.8 trillion, with wide scope for innovation.
Let’s take a look at factors that have been working in favor of medical product makers.
What’s Driving the Medical Products Space?
Going by a CISION report, the United States is the largest Medical Products market in the world, raking in more than $180 billion in revenues in a year. It has been a very profitable investment space of late.
U.S. medical product companies are currently riding high on R&D innovation, thanks to the 2.3% Medical Device tax abolition earlier this year. According to an article published in Xtalks, the Medical Device tax was responsible for a $34-million reduction in R&D spending by companies.
Furthermore, the broader Medical sector is currently seeing increasing use of cloud-based applications and artificial intelligence (AI). Companies like Veeva Systems VEEV and athenahealth’s ATHN focus on cloud-based services deserve a special mention here.
Per research by LEGACY MEDSearch, the global medical device technology market is expected to see a CAGR of 4.6% to reach a value of $563,886.5 million by 2025.
Here we discuss how companies with significant exposure to medical technology and innovation have been creating opportunities for investors.
3 Top Medical Product Stocks
Against this backdrop, investors may want to take note of a few companies. With the help of the Zacks Stock Screener, we have zeroed in on three Medical Product stocks which are currently well-positioned in the U.S. Medical Products space. These stocks sport a Zacks Rank #1 (Strong Buy) and have outperformed the industry in a year’s time. You can see the complete list of today’s Zacks #1 Rank stocks here.
Surmodics, Inc. SRDX has skyrocketed 145.2% in a year’s time.
The company’s long-term earnings growth is projected at 10%. Over the last 60 days, the Zacks Consensus Estimate for the company’s current-year earnings per share shot up to 43 cents from a loss of 2 cents.
Surmodics, Inc. Price and Consensus
Surmodics, Inc. Price and Consensus | Surmodics, Inc. Quote
Minnesota-based Surmodics is a leading provider of medical device and In Vitro Diagnostics (IVD) technologies to the healthcare industry.
The company’s IVD technologies have been consistently driving the top line. Earlier this year, the company announced the launch of MatrixGuard Diluent which provides assay developers unsurpassed blocking of matrix interferences.
Moreover, in the non-drug delivery R&D pipeline, Surmodics received FDA clearance for its Telemark support microcatheter.
Quidel Corporation QDEL has rallied 58.7% in a year’s time.
The company’s long-term earnings growth is projected at 25%. Over the last 60 days, the Zacks Consensus Estimate for the current-year earnings per share has improved 7.7% to $2.80.
Quidel Corporation Price and Consensus
Quidel Corporation Price and Consensus | Quidel Corporation Quote
California-based Quidel discovers, develops, manufactures and markets point-of-care, rapid diagnostic tests for detection of medical conditions.
The company’s Rapid Visual Tests or Lateral Flow Assays are used to rapidly diagnose a wide variety of medical conditions. Also, the Lyra Adenovirus Assay is a real-time PCR in vitro diagnostic assay for the qualitative detection of human Adenovirus viral DNA.
Quidel received FDA approvals for its Sofia 2 Lyme FIA and Solana Bordetella Complete Assay, which has fortified its position.
ICU Medical, Inc. ICUI has gained 44.3% in the past year.
The company’s earnings growth for the current year is projected at 31.5%. Over the last 60 days, the Zacks Consensus Estimate for the current-year earnings per share has risen 13.7% to $8.48.
ICU Medical, Inc. Price and Consensus
ICU Medical, Inc. Price and Consensus | ICU Medical, Inc. Quote
California-based ICU Medical develops, manufactures and sells innovative medical devices used in vascular therapy, oncology and critical care applications.
The company’s popular products include Custom IV Sets, IV Infusion Therapy Solutions high-performance infusion pumps.
However, the ongoing trade tensions and Hurricane Florence have dealt a blow to the U.S. economy.
Lately, the Trump administration announced a new round of tariffs on $200 billion worth of Chinese imports. The tariffs are likely to rise to 25% by early 2019. Notably, a majority of these imports include medical products, devices and medical imaging components. If China takes retaliatory action, Trump has promised to impose higher tariffs (phase three) on $267 billion of additional Chinese imports. Needless to say, this has triggered a short-term decline in the sector.
Despite such geo-political uncertainties, the long-term prospects of the Medical Products industry are bright at the moment.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Veeva Systems Inc. (VEEV) : Free Stock Analysis Report
athenahealth, Inc. (ATHN) : Free Stock Analysis Report
ICU Medical, Inc. (ICUI) : Free Stock Analysis Report
Surmodics, Inc. (SRDX) : Free Stock Analysis Report
Quidel Corporation (QDEL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research