Medical Device Stocks To Buy [HOT]
In this article, we will take a look at some of the best medical device stocks for 2021. To skip our detailed analysis on the medical device industry, the impact of the COVID-19 pandemic on the industry, and its future outlook, click to see the 5 Medical Device Stocks for 2021.
medical device stocks to buy
The COVID-19 pandemic certainly came out of nowhere and ended up ruining the prospects of many industries across the globe. The airline sector is one example, where up to 46 million jobs were at risk in the previous year because of the spillover effect from the coronavirus pandemic. Most of the other industries and sectors went through the same thing, but during these unprecedented and trying times, the healthcare and medical device industries actually grew beyond our expectations. For example, an industry report released by Fortune Business Insights mentioned that in 2020, the global market size for the medical devices industry was valued at $432.23 billion. This value is expected to grow at a CAGR of 5.4% from 2021 to 2028 to become $657.98 billion.
Despite the above, the medical device sector was also slightly impacted by the outbreak of the pandemic as well. For instance, the pandemic resulted in supply chain disruptions, particularly in 2020, making it harder to distribute medical devices, and since medical procedures became classified into "elective" and "essential" procedures, many of the electives were postponed or canceled entirely, resulting in the industry taking a hit. This hit did take the form of a 3.7% decline in the global medical device market in 2020 but has since become a thing of the past, especially in light of COVID-19 vaccinations becoming accessible and widely distributed across the globe.
Because of the coronavirus pandemic, companies like Becton, Dickinson and Company (NYSE: BDX) are beginning to take the lead in the medical devices sector due to their rapid manufacture and distribution of syringes and needles for the administration of COVID-19 vaccinations across the globe. The global market for disposable syringes alone is due to reach $12.13 billion by 2028, increasing at a CAGR of 5.3%, according to a report by Research and Markets. This growth is unsurprising given statements by the WHO, which claim that around 16 billion injections are administered worldwide in a year, a number likely to ridiculously increase during a pandemic when global vaccinations are becoming more commonplace. For instance, Bloomberg reported on June 23rd that so far, over 2.71 billion vaccination shots have been administered worldwide this year, at a rate of roughly 41.7 million doses in one day. About 319 million of those doses were administered in the US alone.
More than syringes and needles for vaccinations, a report by Lucintel last year also shed light on other sectors in the medical device industry that can be expected to gain prominence and grow exponentially by 2025. These include cardiovascular devices, the use of which is growing alongside the growth of the global geriatric population, and surgical devices. The use of the latter is expected to grow the most in the forecast period till 2025 due to increasing numbers of surgical procedures and growth in the number of people afflicted by chronic diseases across the globe. For instance, a WHO report on the global volume of surgery in 192 WHO member states revealed that about 234.2 million surgical procedures occur across the globe per year.
Hence, the growth of the medical device industry in the past couple of years and the potential of the industry's growth in the future cannot be underestimated. This explosive growth in the industry is helping medical device stocks like Johnson & Johnson (NYSE: JNJ), Abbott Laboratories (NYSE: ABT), Stryker Corporation (NYSE: SYK), Baxter International Inc. (NYSE: BAX), Boston Scientific Corporation (NYSE: BSX) and Bio-Rad Laboratories, Inc. (NYSE: BIO).
Major companies like Amazon.com, Inc. (NASDAQ: AMZN) are also moving into the medical device industry. For instance, Amazon.com, Inc. has launched its own medical device brand called Choice. In addition, Facebook, Inc. (NASDAQ: FB) has also made an entry into the healthcare sector alongside Alphabet Inc. (NASDAQ: GOOG) and Apple Inc. (NASDAQ: AAPL).
Alphabet Inc. (NASDAQ: GOOG) operates in the healthcare sector through their Life Sciences Unit, now known as Verily, developing diabetes management tools and bioelectronic devices for rheumatoid arthritis treatments. On the other hand, Apple Inc. (NASDAQ: AAPL) is developing technology like ResearchKit and CareKit to create FDA-approved health applications for doctors and patients alike. Facebook, Inc. (NASDAQ: FB) has developed its Preventive Health system, which sends users check-up reminders and suggestions for where they can go to get cancer screenings and medical check-ups.
All in all, we can see many major companies making moves in the healthcare and medical device industries, making them some of the most profitable options for investors in 2021. Hence, we have compiled a list of the best medical device stocks for 2021, based on hedge fund popularity and gains in the past 6 months and year to date.
Abiomed, Inc. (NASDAQ: ABMD) is a company working to research and develop medical devices for sale. Their devices assist or replace the pumping function of a failing heart and provide care to heart failure patients. The company ranks 10th on our list of medical device stocks for 2021.
Edwards Lifesciences Corporation (NYSE: EW) is a medical device company providing technology for structural heart disease and critical care and surgical monitoring. It operates in the US, Europe, Japan, and internationally. The company's products include the transcatheter heart valve replacement device for minimally invasive replacements of heart valves. It ranks 9th on our list of medical device stocks for 2021.
Baxter International Inc. (NYSE: BAX) is a developer of healthcare products worldwide. The company offers organ support therapies alongside biological products and medical devices. It ranks 8th on our list of medical device stocks for 2021.
Boston Scientific Corporation (NYSE: BSX) is a manufacturer of medical devices for interventional medical specialties across the globe. The company's devices can diagnose and treat gastrointestinal and pulmonary conditions and urological and pelvic conditions, among others. It ranks 7th on our list of medical device stocks for 2021.
Bio-Rad Laboratories, Inc. (NYSE: BIO) is a medical device company that works in life science research and manufactures clinical diagnostic products for sale in the US, Europe, Asia, Canada, and Latin America. The company develops a range of reagents, apparatus, and laboratory instruments for research and biopharmaceutical production processes. It ranks 6th on our list of medical device stocks for 2021.
Medtech has long been a highly profitable area for investors. As the space has matured and grown more competitive, however, investors have had to become more cautious when picking stocks in this high-growth space.
Over the past five years, for instance, industry giants like Medtronic have lagged the broader markets from a capital appreciation standpoint due to headwinds emanating from legacy portfolios, while up-and-coming device makers such as the diabetes care company DexCom have yielded life-changing gains for shareholders.
Armed with this background, I think the diabetes care specialist Insulet (PODD 0.52%) and the surgical device company Conmed (CNMD 1.70%) are poised to be medtech's two best performers in 2023. Here's why.
The diabetes care specialist Insulet has been a rare bright spot in the medtech stock space in 2022. While most medical device companies have taken a sizable haircut in 2022, Insulet's shares have raced higher by a healthy 14.5% this year.
Insulet's contrarian move has been powered by the U.S. launch of its next-generation insulin pump device, Omnipod 5. Omnipod 5 is a tubeless insulin pump that seamlessly integrates with DexCom's continuous glucose monitoring devices to form a so-called "artificial pancreas."
Conmed, a medtech company focusing primarily on surgical equipment and devices, has slowly morphed into a bona fide value play in 2022. Thanks to the negative impacts of COVID-19, the unfavorable macroeconomic environment, and a temporary disruption due to the implementation of new warehouse management software, the surgical medical device company's shares have plunged by a staggering 38% this year.
What's the catch? A near-term rebound in this case will probably be dependent upon the broader market conditions in 2023. Value stocks, after all, have largely failed to land with nervous investors in this tough macroeconomic climate. That being said, Conmed does sport a fundamentally strong business, and these recent acquisitions will only add to its long-term value proposition.
After outperforming the S&P 500 in 2022, health care stocks have faltered in 2023. Despite the short-term dip, the health care industry can be an excellent defensive play in an environment of economic uncertainty, as people don't typically reduce their prescription drug purchases, put off procedures or cancel doctor visits just because the economy is in a slump. The Centers for Medicare and Medicaid Services estimates that U.S. health care spending will grow by an average annual rate of 5.1% between 2021 and 2030 to reach $6.8 trillion, providing excellent long-term investment opportunities.
Medtronic is a health care device manufacturer that operates in four segments: cardiovascular, medical surgical, neuroscience and diabetes. The company is planning to spin off its patient monitoring and respiratory interventions business as part of its plan to streamline its portfolio and focus on higher-growth sales. Meyer says Medtronic's upcoming slate of product launches coupled with a rebound in global medical procedures will drive upside for Medtronic shares in the next year. Meyer is particularly bullish on the company's robotic assisted surgery platform. CFRA has a "buy" rating and $102 price target for MDT stock, which closed at $81.23 on March 21. 041b061a72