13 Best Medical Device Stocks To Buy Now

Published on December 16, 2022 at 9:21 am by Mohammed Saqib in Hedge Funds, News

In this article, we will discuss the 13 Best Medical Device Stocks To Buy Now. You can skip our detailed analysis of the Medical Device Industry and go directly to the 5 Best Medical Device Stocks To Buy Now.

Just like every other industry, the medical device industry has seen tremendous technological advancement over the past two decades. Medical devices are essential and have become a fundamental part of the healthcare system as they provide a more effective and efficient way of preventing, diagnosing, and treatment for illnesses and diseases.

After the outbreak of COVID-19, the medical device industry grew by 10-14%, whereas in the period leading up to the pandemic (2017-2019), it only witnessed a growth of around 4%. COVID-19 created new demand for medical device products, and the medical technology sector came up with new solutions using technologies like artificial intelligence (AI), machine learning, 3d printing, etc., to tackle the challenges created by the pandemic.

Some developed countries even started working on medical robots to compensate for the shortage of nurses worldwide. According to the COVID-19 Two-Year Impact Survey conducted by The American Nurses Foundation, in the United States, almost 52% of nurses thought of leaving their jobs due to heavy workloads and burnout. The implementation of advanced technologies in the healthcare sector has provided the medical device industry a huge boost even during the pandemic. Just like every other business sector, the medical tech sector also faced issues relating to supply chain disruption, but this period also provided an opportunity for growth for the medical device industry.

According to Statista, in 2022, the medical technology market revenue is projected to reach $575.80 billion. The market’s biggest sector, the medical devices sector, is also forecasted to reach a market volume of $455.10 billion in 2022. Forecasted to grow at a CAGR of 5.95% during 2022-2027, the global medical technology market is forecasted to reach $768.80 billion by 2027.

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Our Methodology

We scanned Insider Monkey’s database of over 900 hedge funds and picked the most popular medical device stocks among these funds. Wall Street analysts are also bullish on most of these stocks.

13. Varex Imaging Corporation (NASDAQ:VREX)

Forward P/E ratio as of December 10: 28.17

Number of Hedge Fund Holders: 15

Varex Imaging Corporation (NASDAQ:VREX) engages in the designing and manufacturing of components used in X-ray imaging. The company’s research and manufacturing operations run through the United States, Europe, China, and the Philippines. The company’s operations are divided into two segments. The medical segment generates the majority of revenue and deals in components such as X-ray tubes, digital flat panel image detectors, ionization chambers, high-voltage connectors, etc. The industrial sector manufactures and sells Linatron X-ray accelerators.

On October 12, 2022, Young Li, an analyst at Jefferies, began covering Varex Imaging Corporation (NASDAQ:VREX) with a price target of $24 and a Hold rating. The analyst believes that the present macro environment is difficult for the company and its customers due to persistent inflation and supply chain challenges.

According to Insider Monkey’s database, 15 hedge funds had stakes in Varex Imaging Corporation (NASDAQ:VREX) at the end of the September quarter. Pzena Investment Management remained the leading stakeholder of the company at the end of the third quarter.

In addition to Varex Imaging Corporation (NASDAQ:VREX), InMode Ltd. (NASDAQ:INMD), Pro-Dex, Inc. (NASDAQ:PDEX), and Sensus Healthcare, Inc. (NASDAQ:SRTS) are included in our list of 13 best medical device stocks to buy now.

12. Abbott Laboratories (NYSE:ABT)

Forward P/E ratio as of December 10: 24.15

Number of Hedge Fund Holders: 62

Founded in 1888, Abbott Laboratories (NYSE:ABT) manufactures and markets medical devices including diagnostic equipment and testing kits. Almost 60% of the company’s revenue is generated from sales outside of the United States.

On October 20, 2022, Shagun Singh, an analyst at RBC Capital, reduced his price target on Abbott Laboratories (NYSE:ABT) to $126 while keeping an Outperform rating on the stock. The analyst decreased his price target after the company’s Q3 results, as core growth slowed down during the quarter.

As per Insider Monkey’s database, 62 hedge funds remained bullish on Abbott Laboratories (NYSE:ABT) at the end of Q3 2022. Fisher Asset Management came out to be the biggest holder of the company’s shares at the end of the quarter.

Diamond Hill Capital made the following comment about Abbott Laboratories (NYSE:ABT) in its Q3 2022 investor letter:

Also among our bottom contributors were health care products manufacturer Abbott Laboratories (NYSE:ABT), global pharmaceutical company Pfizer, media and technology giant Alphabet, and insurance company American International Group (AIG).

Abbott has been working through a recall of its infant formula brand Similac in the US, which has continued to pressure its share price. Although the recall will impact near-term revenues, we are not concerned about any long-term impacts. We remain optimistic about the company given it is one of the highest quality names in health care, in our view, with a talented management team that makes smart capital allocation decisions. Abbott also has leading health care and consumer franchises with a particularly strong competitive position in its medical device business. The company continues to launch innovative products in key strategic areas (such as diabetes, structural heart, and diagnostics), which should help drive not only revenue growth but margin expansion.

11. Teleflex Incorporated (NYSE:TFX)

Forward P/E ratio as of December 10: 17.39

Number of Hedge Fund Holders: 23

Headquartered in Pennsylvania, United States, Teleflex Incorporated (NYSE:TFX) manufactures hospital supplies and devices with a primary focus on bloodstream/vascular and surgical areas. The company operates in seven segments that include vascular access (generating 25% of the total revenue in 2021), interventional, interventional urology, surgical, anesthesia, original equipment, and the rest of the products. The company’s 60% of sales come from the domestic market.

On October 28, 2022, David Turkaly, an analyst from JMP Securities, reduced his price target on Teleflex Incorporated (NYSE:TFX) to $330 while keeping an Outperform rating on the stock. According to the analyst, Teleflex Incorporated (NYSE:TFX) has faced several challenges this year, including supply chain issues and labor shortages. However, the company is now well-positioned to address the issues at hand.

23 hedge funds were long on the company’s stock at the end of the third quarter, according to Insider Monkey’s database. Citadel Investment Group had the biggest long position in the company at the end of Q3 2022.

10. QuidelOrtho Corporation (NASDAQ:QDEL)

Forward P/E ratio as of December 10: 18.69

Number of Hedge Fund Holders: 29

QuidelOrtho Corporation (NASDAQ:QDEL) deals with the development, manufacturing, and marketing of diagnostic healthcare products. The product portfolio of the company includes point-of-care tests for diseases such as critical cardiac health, autoimmune biomarkers, and other infectious diseases. QuidelOrtho Corporation (NASDAQ:QDEL) is also engaged in producing clinical and at-home COVID-19-detecting products.

On December 6, 2022, RBC Capital analyst Conor McNamara started covering QuidelOrtho Corporation (NASDAQ:QDEL) with a price target of $125, and an Outperform rating. Conor McNamara believes that following the pandemic, the company will have a more diverse regional and product footprint and a larger market share in more lucrative end markets.

At the end of Q3 2022, 29 hedge funds in Insider Monkey’s database were long QuidelOrtho Corporation (NASDAQ:QDEL) at the end of the quarter. Birchview Capital remained the leading stakeholder of the company at the end of Q3 2022

Meridian Funds made the following comment about QuidelOrtho Corporation (NASDAQ:QDEL) in its Q3 2022 investor letter:

QuidelOrtho Corporation (NASDAQ:QDEL) is a global leader in the diagnostics industry. The merger of Quidel and Ortho Clinical Diagnostics has resulted in a top 10 player in the in-vitro diagnostics industry, combining Quidel’s strong point of care platform with Ortho’s blood chemistry and transfusion platform. We believe the new company will be much more consistent in its ability to deliver steady top-line growth at attractive margins to fuel free cash flow growth. Further boosting our conviction in QuidelOrtho is its robust product pipeline. Pipeline developments include the company’s Savanna platform, which solves a long-term need for near-patient molecular testing that is accurate, fast, and economical. We believe the stock weakness is due to the anticipated decline in COVID-19 testing. However, we believe the long-term earnings and free cash flow profile are underappreciated, and as a result we increased our position in the stock.

9. Zimmer Biomet Holdings, Inc. (NYSE:ZBH)

Forward P/E ratio as of December 10: 17.92

Number of Hedge Fund Holders: 37

Zimmer Biomet Holdings, Inc. (NYSE:ZBH) manufactures and markets orthopedic reconstructive implants and orthopedic surgical equipment. After acquiring Centerpulse in 2003 and Buimet in 2015, Zimmer Biomet Holdings, Inc. (NYSE:ZBH) is now leading the reconstructive market in the US, Europe, and Japan.

On November 23, 2022, Larry Biegelsen, an analyst at Wells Fargo, upgraded his rating on Zimmer Biomet Holdings, Inc. (NYSE:ZBH) to Equal Weight with a price target of $124. The analyst believes the company is showing strong growth in the ortho market, which should drive upside in the stock.

As per Insider Monkey’s database, 37 funds remained bullish on the company at the end of Q3 2022. Citadel Investment Group had the biggest long position on the company’s shares at the end of the third quarter.

8. NuVasive, Inc. (NASDAQ:NUVA)

Forward P/E ratio as of December 10: 17.70

Number of Hedge Fund Holders: 25

NuVasive, Inc. (NASDAQ:NUVA) engages in minimally invasive surgical devices. The company’s specialty is in its solutions and devices for spine surgery. These devices offer a surgical platform that minimizes soft-tissue damage and contact with vital nerves while maximizing visibility during spine fusion surgery. Other products include biologics that help in spinal fusion and in the process of bone healing. NuVasive, Inc. (NASDAQ:NUVA) maximum revenue is generated from the United States via its spine surgery products.

On November 10, 2022, Joshua Jennings, an analyst at Cowen, reduced his price target on NuVasive, Inc. (NASDAQ:NUVA) to $50 while keeping an Outperform rating on the stock. According to the analyst, the growth of key products like Simplify and Pulse should continue to help drive strong performance in the future.

According to Insider Monkey’s database, 25 hedge funds held stakes in NuVasive, Inc. (NASDAQ:NUVA) at the end of the third quarter ending September 2022. Citadel Investment Group remained the leading stakeholder in the company at the end of Q3 2022.

7. Integra LifeSciences Holdings Corporation (NASDAQ:IART)

Forward P/E ratio as of December 10: 15.65

Number of Hedge Fund Holders: 26

Integra LifeSciences Holdings Corporation (NASDAQ:IART) is a medical equipment company based in New Jersey. The company develops products for regenerative therapy, neurosurgical applications, and extremity orthopedics. Although the company sells its products worldwide, the majority of its revenue comes from domestic sales.

On October 27, 2022, David Turkaly, an analyst at JMP Securities, reduced his price target on Integra LifeSciences Holdings Corporation (NASDAQ:IART) to $75 from $85 while keeping an Outperform rating on the stock. The analyst believes that the improvement in the company’s volumes will counterbalance the currency headwinds and persisting supply problems.

As per Insider Monkey’s database, 26 hedge funds owned stakes in Integra LifeSciences Holdings Corporation (NASDAQ:IART) at the end of the September quarter. Arrowstreet Capital was the most bullish fund on the company’s stock at the end of Q3 2022.

6. Smith & Nephew plc (NYSE:SNN)

Forward P/E ratio as of December 10: 16.08

Number of Hedge Fund Holders: 12

Smith & Nephew plc (NYSE:SNN) is a UK-based company that engages in the manufacturing and marketing of orthopedic devices, arthroscopic technologies, sports medicines, and wound-care solutions. The United States market is responsible for almost half of the total revenue, while only over 30% of the total sale comes from other developed markets. The orthopedic products drive almost 42% of the company’s total revenue.

On November 9, 2022, Robert Davies, an analyst at Morgan Stanley, reduced his price target on Smith & Nephew plc (NYSE:SNN) to £1,217 from £1,229 while keeping an Equal Weight rating on the stock.

According to Insider Monkey’s database, 12 hedge funds held shares of the company at the end of the third quarter of 2022. Arrowstreet Capital was the most bullish fund on the company’s stock at the end of Q3 2022.

Click to continue reading and see 5 Best Medical Device Stocks To Buy Now.