Seven Hot Medical Device Ideas

I have made the case before that medical technology has something to appeal to any type of investor. If you want value, you will find it. If you want income, you will find it. Today, we talk about some of the most highly-valued "hot" stocks in the space. 

Edwards Lifesciences - Not Boring Anymore 
For quite a while, Edwards Lifesciences (NYSE:EW) was a sleepy company. A leader in tissue heart valves and critical care monitoring products, there was a time when it was difficult to get anybody interested in this idea.

Not anymore.

Edwards is making a concerted effort to move into higher-growth, higher-margin products. With a very interesting new approach to heart valve replacement, the minimally-invasive trans-catheter Sapien valve, the company is well on its way and could become a consistent double-digit grower. (For more, see A Checklist To Successful Medical Technology Investment.)


For the complete article, please go to:
http://stocks.investopedia.com/stock-analysis/2010/7-Hot-Medical-Device-Ideas-EW-ISRG-THOR-DXCM-PODD-NUVA-MEND0707.aspx

Intuitive Surgical - Are Robots To Be Trusted?

It is a given that if you invest in stocks long enough, you will have a thick mental file labeled "Should'a, Could'a, Would'a." I typically do not give much mental time share to ruminating over what could have been bought, but one stock that does get my teeth grinding is Intuitive Surgical (Nasdaq:ISRG).  


Regardless of why I did not pull the trigger and buy the stock, it's worth investigating whether or not Intuitive Surgical has the right stuff to endure. Will it be a flash in the pan, or will it stay independent and become a future med-tech titan? 

The full article can be read at: 
http://stocks.investopedia.com/stock-analysis/2010/Intuitive-Surgical---Are-Robots-To-Be-Trusted-ISRG-HIT-SI-MDT-BSX0601.aspx 

Medtronic - Life In The Crosshairs

When you execute as well as Medtronic (NYSE: MDT) has over the years, when you become a leading company in virtually every market in which you compete, you get the dubious reward of being the company everyone else wants to knock off the mountain. So far, though, Medtronic management continues to demonstrate that it is capable of taking a huge business and making it even bigger. 

The Quarter That Was 
Medtronic reported its fiscal fourth quarter results May 25. As has been the case of late, the results were "good ... but not great". Revenue was up about 6% in constant currency terms, and that was more or less in line with expectation. Likewise, bottom-line earnings per share were up 9% and two pennies higher than the average analyst estimate.  

For the full article:
http://stocks.investopedia.com/stock-analysis/2010/Medtronic---Life-In-The-Crosshairs-MDT-BSX-STJ-ZOLL-NUVA-CFN-EW0528.aspx

Please note, the editor of the piece made a small error in spelling out St. Jude as "Saint Jude".

Shopping Time In Medical Technology?

The following has been posted on Investopedia:
http://stocks.investopedia.com/stock-analysis/2010/Shopping-Time-In-Medical-Technology-MDT-VOLC-ZOLL-ABMD-THOR0506.aspx.

It is a little strange for me to see ATS Medical get a bid. We banked that company when I was just a junior analyst at Piper and the CEO/founder, Manny, was (and still is) a one-of-a-kind guy. ATSI has always been something of a sad lesson for me; sad in that it proves that the best technology/product doesn't always win and that the company with the better marketing is more likely to win. 

In any event, it's always fun to speculate on who may be next to go out in the space. I hope you enjoy the piece.  


Amidst the paper blizzard of earnings releases, a little deal in the med-tech world took place. Medical device giant Medtronic (NYSE:MDT) announced that it was buying small cardiology company ATS Medical (Nasdaq:ATSI) for about $370 million in cash and assumed debt. The deal will bring some quality heart valve technology to Medtronic and cash to long-suffering shareholders of ATS Medical.


Buy The TechnologyThe ATSI deal is a relatively minor one in the bigger scheme of things, but it does at least highlight one type of deal that could be increasingly attractive - tucking in a small company that has good technology, but has not been able to leverage it effectively. Following this mold, investors should look for companies that have acknowledged quality technology, but for whatever reasons have not been able to deliver the growth that investors want.

You can read the rest at Investopedia: http://stocks.investopedia.com/stock-analysis/2010/Shopping-Time-In-Medical-Technology-MDT-VOLC-ZOLL-ABMD-THOR0506.aspx.

Three Growth Med-Techs Show Their Cards

The following went up this morning on Investopedia:
http://stocks.investopedia.com/stock-analysis/2010/Three-Growth-Med-Techs-Show-Their-Cards-HOLX-IRIS-VOLC-GE-CPTS-GPRO-BSX-IHI0506.aspx.

As earnings season winds down, a relatively rare trifecta occurred May 3 as three quality growth med-tech stocks reported their earnings. Hologic (Nasdaq: HOLX), IRIS International (Nasdaq: IRIS) and Volcano (Nasdaq: VOLC) all reported earnings with varying degrees of performance. 

For the full article:   http://stocks.investopedia.com/stock-analysis/2010/Three-Growth-Med-Techs-Show-Their-Cards-HOLX-IRIS-VOLC-GE-CPTS-GPRO-BSX-IHI0506.aspx.

Can Boston Scientific Ever Get It Right?

And so continues my long love affair with not liking Boston Scientific (BSX).

http://stocks.investopedia.com/stock-analysis/2010/Can-Boston-Scientific-Ever-Get-It-Right-BSX-STJ-MDT-ABT-VOLC0430.aspx

It is only fair to state that from the beginning that I have been a long-term skeptic and critic of Boston Scientific (NYSE:BSX), going back to the late 1990's when I covered the stock as a junior research analyst. Ever since, my skepticism has been rewarded as the company has made missteps and blunders too numerous to recount here. 

With a relatively new CEO at the helm and earnings fresh on the tape, it's worthwhile to take another look at this well-known name to see if anything has changed for the better.  

For the remainder of the article: 
  http://stocks.investopedia.com/stock-analysis/2010/Can-Boston-Scientific-Ever-Get-It-Right-BSX-STJ-MDT-ABT-VOLC0430.aspx

ICU Medical - The Roller Coaster Ride Continues

ICU Medical (ICUI) has always been an unusually volatile stock, mostly due to the company's reliance/relationship with Hospira (HSP). I had hoped that with ICUI's acquisition of HSP's critical care business and the company's expansion of domestic distribution, that volatility would ease up.

Silly wabbit.

ICUI missed on the top and bottom lines, and is taking a spanking in the market today. 

To some extent, this quarter was a "ghost of Hospira" situation, as the critical care business once again under-delivered the goods. Sales were softer than I had been hoping and yet the influence of these sales was still sufficient to lower the gross margin more than I had expected.

On the plus side, the company's core CLAVE business was quite strong, even as the custom tubing business was a little weak. What's more, the company saw great growth in domestic distribution and overseas sales, and Hospira was about 37% of the company's sales. On top of that, the company is apparently making great progress with its plant (under construction) in Slovakia. This plant could be a key catalyst for improving overseas growth; a very under-penetrated market for ICUI.

I still think that this year will be something of a kitchen sink for the company, as management tries to repair the badly neglected critical care business that it bought from Hospira and as the company faces various costs in opening that plant in Slovakia. Longer term, though, I think the company can get a lot of leverage out of both -- critical care is a decent market with only one real competitor (Edwards (EW)) and a little attention and focus here could reap some meaningful cash flow and growth. With the Slovakia plant on line, the company could look to several years of strong (25%+) revenue growth with even better margins and more predictability.

And hey, let's not forget that management basically maintained its guidance -- suggesting that the first half of the year may be a little worse than I'd hoped, but that the second half could be meaningfully better. 

ICUI is a stock that will drive you crazy, but I think you can buy it here and make decent money on it. It's not going to be a go-go grower like Intuitive Surgical (ISRG) or a darling like Illumina (ILMN). What it is, though, is a proven generator of ample cash flow and a management team that does not waste shareholders' time or money.

At this price, I have to admit that I'm thinking of adding it to my own PA.

Small Med-Tech Names You Should Know

A quirk of timing led to me having two articles posted today on Investopedia.

Here is the second one.


http://stocks.investopedia.com/stock-analysis/2010/Small-Med-Tech-Names-You-Should-Know-ICUI-IRIS-LMNX-HSP-ILMN0415.aspx


Small Med-Tech Names You Should Know

Healthcare is a huge space, and for every Medtronic (NYSE:MDT) or Pfizer (NYSE:PFE), there are dozens of quality names that go unnoticed by the investing public. A little time and effort, though, can uncover some intriguing names that may deserve a place in investors' portfolios. Today we highlight three ideas.

http://stocks.investopedia.com/stock-analysis/2010/Small-Med-Tech-Names-You-Should-Know-ICUI-IRIS-LMNX-HSP-ILMN0415.aspx

Will St. Jude Keep The Beat? (STJ, MDT, BSX)

Sorry for the slight delay, folks.

Here's the latest that I've written for Investopedia.

http://community.investopedia.com/news/IA/2008/Will-St.-Jude-Keep-The-Beat-STJ-MDT-BSX1020.aspx.

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