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5 MedTech Stocks to Buy Before Q3 Earnings

Zacks Equity Research

Despite political fireworks in Washington, DC at present, the MedTech industry has so far witnessed a positive run in 2017. The space received a breather with the failure of the highly contentious Graham-Cassidy bill. Our apprehension remains constant owing to the fact that Medical technology firms are struggling with higher tax and anti-inversion bottlenecks are simultaneously stressed by stronger dollars, pricing and shipping-related issues as well as core market challenges.

Given such volatile economic conditions, it is only natural that investors will feel intimidated with regard to the investment scenario. Increased volatility on the back of a significant increase in the CBOE Volatility Index (VIX) indicates bearish market prospects.

Impressive Prospects Ahead

According to a survey by EvaluateMedTech World Preview, the MedTech space is positioned for impressive growth in the near term. This should naturally compel investors to keep an eye out on the sector that is generally not in the limelight. At a glance, Medtech sales are expected to reach $522 billion at a CAGR of 5.1% by 2022, worldwide.

The Q3 earnings season is just around the corner and is likely to be in full swing in a couple of weeks. It will be interesting to see how the MedTech space performs amid such a mixed scenario.

How to Make a Choice?

With a wide number of stocks in the MedTech sector that often hamper stock-picking prowess, the Zacks methodology could offer some relief. One can narrow down choices by focusing on stocks that sport the desirable combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP is our proprietary methodology to determine stocks which have the best chance to surprise in their next earnings announcement. It shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate.

Our research shows that 70% of stocks with this combination have the chance of a positive earnings surprise. An earnings beat boosts investor’s confidence in the stock, which is reflected in its rapid price appreciation. You can uncover the best stocks to buy or sell before they report with our Earnings ESP Filter.

Stocks Worth Investing

Below we discuss five MedTech stocks that are worth investing in before the earnings season comes in full force.

PRA Health Sciences Inc. PRAH

PRA Health Sciences is a leading global contract research organization. The company provides outsourced clinical development services to the biotechnology and pharmaceutical industries. PRA’s global clinical development platform includes approximately 70 offices across North America, Europe, Asia, Latin America, South Africa, Australia and the Middle East. Year to date, the stock with 43.4% return has outperformed the S&P 500’s paltry return of 13.1%.

The company currently sports a Zacks Rank #1 and has an Earnings ESP of +3.30% for the third quarter. The Zacks Consensus Estimate has increased 4 cents to 84 cents in the last four weeks.


Mesa Laboratories Inc. MLAB

Mesa Laboratories is a global technology company focused in the pharmaceutical, healthcare, industrial safety, environmental and food & beverage industries. The company operates through four divisions: Biological Indicators, Instruments, Cold Chain Monitoring and Cold Chain Packaging. It currently carries a Zacks Rank #2 and has an Earnings ESP of +0.83% for the quarter. Its earnings estimates have been raised 2 cents in the last four weeks. Year to date, the stock with 26.2% return has outperformed the S&P 500’s return of 13.1%.

ConforMIS Inc. CFMS

ConforMIS is a medical technology company that uses proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint-replacement implants. The implants are customized to suit each patient’s unique anatomy. ConforMIS has a Zacks Rank #2 and an earnings ESP of +5.23%. Its Zacks Consensus Estimate has improved 4 cents to a loss of 31 cents in the last three months.


Check-Cap Ltd. CHEK

Check-Cap is a clinical-stage medical diagnostics company developing C-Scan. It is a capsule-based system for preparation-free colorectal cancer screening. Utilizing ultra-low dose X-ray and wireless communication technologies, the capsule generates information on the contours of the inside of the colon as it passes naturally. Check-Cap's third-quarter prospects look bright as it boasts an earnings ESP of +7.14% combined with a Zacks Rank #2. Its earnings estimates have improved by 2 cents in the last four weeks.


Streamline Health Solutions Inc. STRM

Streamline Health Solutions is a healthcare company engaged in capturing, aggregating and translating enterprise data that support revenue cycle optimization. It delivers integrated solutions, technology-enabled services and analytics for healthcare enterprises.

Streamline Health has a Zacks Rank #2 and an earnings ESP of +5.23%. Its Zacks Consensus Estimate has narrowed 2 cents to a loss of six cents in the past four weeks. Year to date, the stock with 115.2% return has outperformed the S&P 500’s return of 13.1%.


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Streamline Health Solutions, Inc. (STRM) : Free Stock Analysis Report
Mesa Laboratories, Inc. (MLAB) : Free Stock Analysis Report
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