Investors are presented with a range of possibilities for pursuing the volatile market. There’s the option of snapping up bargain buys for the long-term, which should we enter another recession, could continue to weaken. There’s purchasing traditional safety stocks at their teetering highs or sitting out all together. There are also medical device stocks.
While medical device stocks can inadvertently get lumped in with biotech, a highly risky sector, they’re much more reliable. After all, the premier human impulse is to survive, and if that means getting a heart valve, the economy is not going to be first consideration. Human mortality is static, even if the broader market is not, making an investment in medical device stocks more stable than many other wobbling sectors.
That said, this is not fool proof nor are all medical device stocks created equal. Structural weakness or a bad balance sheet can quickly sour an investment, so due diligence is important. It’s also worthwhile to mention that hospital spending has been lagging as a result of the economy, but many share prices across medical device stocks have that already factored into their shareprices.
Below, are a few that look healthy and primed for long-term gains.
Medtronic (MDT): Medtronic is one of the larger medical device stocks and they have a healthy dividend payout and a knack of generating cash-flow. Medtronic is also extremely discounted at the moment, trading near its 52-week lower after the recent sell-off. The company, which is involved in researching, designing, manufacturing and selling pain alleviation products and device-based medical therapies, has a 10.8 P/E ratio.
Carefusion (CFN):Care fusion spun off of Cardinal Health in 2009 and has been outpacing many of its competitors. Between a number of acquisitions and healthy product development the company, which focuses on equipment for intensive-care units, the company seems to be on deck for increase profitability. During the interim period before new products begin to produce yields, the company has been undergoing restructuring and lowering its overhead. The result has led to a near 15 percent climb in share prices for August and double digit profit growth.
Johnson & Johnson (JNJ): Johnson & Johnson is not a pure medical device company but that could work in its favor. Shares of the company are off 52-week highs but the range indicated stability and the recent acquisition of Synthes, positions the company to rule the prosthetic hip and knee industry in the coming years. Baby boomers are entering old age, which is likely to give this company as a rise in operations drives profit.
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