5 Best Medical Technology Stocks to Buy

In this article, we discuss 5 best medical technology stocks to buy. If you want to see more stocks in this selection, check out 11 Best Medical Technology Stocks to Buy. 

5. Edwards Lifesciences Corporation (NYSE:EW)

Number of Hedge Fund Holders: 57

Edwards Lifesciences Corporation (NYSE:EW) is a California-based provider of products and technologies for structural heart disease, critical care, and surgical monitoring in the United States, Europe, Japan, and internationally. On November 1, Edwards Lifesciences Corporation (NYSE:EW) announced an accelerated share repurchase agreement to buy back $750 million of its common stock. The company has repurchased more than $1.7 billion of its common stock in 2022. Edwards Lifesciences Corporation (NYSE:EW) is one of the best medical technology stocks to invest in. 

On December 12, Citi analyst Joanne Wuensch maintained a Buy recommendation on Edwards Lifesciences Corporation (NYSE:EW) but lowered the firm’s price target on the shares to $92 from $99. Looking into 2023, “many headwinds remain” for the North America medical technology group, but these should ease in the second half of next year, which will improve operating margins, the analyst told investors in a research note. 

According to Insider Monkey’s Q3 data, 57 hedge funds were long Edwards Lifesciences Corporation (NYSE:EW), up from 39 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 7.5 million shares worth $623 million. 

Here is what Wedgewood Partners specifically said about Edwards Lifesciences Corporation (NYSE:EW) in its Q3 2022 investor letter:

“Edwards Lifesciences Corporation (NYSE:EW) reported just +5% growth in revenue (foreign exchange adjusted) compared to a year ago. While this quarter represented a deceleration in revenue growth from earlier this year, much of that was due to hospital staffing shortages and the vagaries of global healthcare systems emerging from pandemic disruptions. The Company received FDA approval for its minimally invasive mitral valve repair system, PASCAL, and also presented compelling related clinical data, which should help support accelerating growth over the next few years. As for Edwards’ core TAVR system, there continues to be a (unfortunately) pent-up, untreated population suffering from severe aortic stenosis that will finally be able to find their way back into healthcare systems as labor market pressures ease.”

4. IQVIA Holdings Inc. (NYSE:IQV)

Number of Hedge Fund Holders: 62

IQVIA Holdings Inc. (NYSE:IQV) is a North Carolina-based company that provides advanced analytics, technology solutions, and clinical research services to the life sciences industry in the Americas, Europe, Africa, and the Asia Pacific. It operates through three segments – Technology & Analytics Solutions, Research & Development Solutions, and Contract Sales & Medical Solutions. On October 26, IQVIA Holdings Inc. (NYSE:IQV) reported a Q3 non-GAAP EPS of $2.48 and a revenue of $3.56 billion, outperforming Wall Street estimates by $0.10 and $20 million, respectively. 

On December 6, Cowen analyst Charles Rhyee initiated coverage of IQVIA Holdings Inc. (NYSE:IQV) with an Outperform rating and a $251 price target. The analyst sees “multiple drivers of multiple expansion and share price outperformance” for IQVIA Holdings Inc. (NYSE:IQV), including an expanding total addressable market, better appreciation of its TAS segment, higher capital deployment, and a “more defensive/resilient performance in more recessionary environments.” 

According to Insider Monkey’s data, 62 hedge funds were bullish on IQVIA Holdings Inc. (NYSE:IQV) at the end of September 2022, compared to 53 funds in the prior quarter. Thomas Steyer’s Farallon Capital is the leading stakeholder of the company, with 3.20 million shares worth $581 million. 

L1 Capital International made the following comment about IQVIA Holdings Inc. (NYSE:IQV) in its Q3 2022 investor letter:

“During the quarter we made an initial investment in one new business, added to our investment in Booking Holdings (Booking), and reduced our investment in IQVIA Holdings Inc. (NYSE:IQV), using the proceeds to increase our investment in Danaher.

IQVIA and Danaher have overlapping drivers, with both companies being ‘picks and shovels’ businesses servicing the life sciences industry. We remain comfortable with both businesses and determined it was more appropriate to make the position size in each company more comparable. We would consider making our investment in both companies larger if valuations become even more compelling.”

3. DexCom, Inc. (NASDAQ:DXCM)

Number of Hedge Fund Holders: 62

DexCom, Inc. (NASDAQ:DXCM) is a California-based medical device company focused on the design, development, and commercialization of continuous glucose monitoring systems in the United States and internationally. On October 27, DexCom, Inc. (NASDAQ:DXCM) reported a Q3 non-GAAP EPS of $0.28 and a revenue of $769.6 million, outperforming Wall Street estimates by $0.04 and $18.56 million, respectively. For full-year 2022, DexCom, Inc. (NASDAQ:DXCM) reported a revenue guidance of approximately $2.88 billion to $2.91 billion, indicating an 18%-19% growth, versus a consensus of $2.89 billion. It is one of the best medical technology stocks to consider. 

On December 12, Citi analyst Joanne Wuensch raised the firm’s price target on DexCom, Inc. (NASDAQ:DXCM) to $146 from $117 and maintained a Buy rating on the shares. 

According to Insider Monkey’s data, 62 hedge funds were bullish on DexCom, Inc. (NASDAQ:DXCM) at the end of the third quarter of 2022, compared to 56 funds in the prior quarter. Brandon Haley’s Holocene Advisors is a significant position holder in the company, with 1.73 million shares worth $139.5 million.   

Here is what ClearBridge Large Cap Growth ESG Strategy has to say about DexCom, Inc. (NASDAQ:DXCM) in its Q2 2022 investor letter: 

“Multiple compression has also hurt higher growth health care companies like DexCom (NASDAQ:DXCM), despite its strong fundamentals. We continue to build out the position as we gain greater visibility on the catalysts of accelerating uptake in Type 2 diabetes patients and the launch of its G7 continuous glucose monitor in the U.S. and Europe. DexCom was hurt in the quarter by market speculation that it would acquire a diabetes pump provider, which would be outside of its core competency.”

2. Intuitive Surgical, Inc. (NASDAQ:ISRG)

Number of Hedge Fund Holders: 69

Intuitive Surgical, Inc. (NASDAQ:ISRG) is a California-based company that develops, manufactures, and markets products that enable physicians and healthcare providers to enhance the quality of and access to minimally invasive care in the United States and internationally. On October 25, Intuitive Surgical, Inc. (NASDAQ:ISRG) inked a $1 billion share repurchase agreement with Citibank. The company will make an initial payment of $1 billion to Citi and receive an initial delivery of nearly 3.6 million shares. Final settlement of the agreement is expected to occur around the last week of December. 

On December 12, investment advisory Citi raised the firm’s price target on Intuitive Surgical, Inc. (NASDAQ:ISRG) to $318 from $245 and maintained a Buy rating on the shares. Analyst Joanne Wuensch issued the ratings update. 

According to Insider Monkey’s third quarter database, 69 hedge funds were bullish on Intuitive Surgical, Inc. (NASDAQ:ISRG), compared to 56 funds in the prior quarter. Israel Englander’s Millennium Management is a significant position holder in the company, with 4.2 million shares worth $796 million. 

Polen Capital made the following comment about Intuitive Surgical, Inc. (NASDAQ:ISRG) in its Q3 2022 investor letter:

“Our sale of Intuitive Surgical, Inc. (NASDAQ:ISRG) reflected our concern that the company’s earnings growth over the next few years was likely to be somewhat lower than we would hope. Hospital and government capital budgets are coming under pressure from wage and supply chain inflation that they cannot readily pass on to patients and insurers. At the same time, the installed base of Da Vinci robots left to upgrade to new systems is low. If that slower growth view plays out, it would be difficult to get the double-digit annualized return we require, given the company’s higher valuation relative to most other companies in the Portfolio as of now.”

1. Danaher Corporation (NYSE:DHR)

Number of Hedge Fund Holders: 89

Danaher Corporation (NYSE:DHR) is a Washington-based company that designs, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide. The company operates through three segments – Life Sciences, Diagnostics, and Environmental & Applied Solutions. On December 6, Danaher Corporation (NYSE:DHR) declared a $0.25 per share quarterly dividend, in line with previous. The dividend is payable on January 27, 2023 to shareholders of record on December 30. It is one of the premier medical technology stocks to invest in. 

On December 13, Deutsche Bank analyst Justin Bowers initiated coverage of Danaher Corporation (NYSE:DHR) with a Buy rating and a $310 price target. The stocks that outperform in 2023 “will provide downside protection or are idiosyncratic,” the analyst told investors in a research note. He recommends “captains of culture” Danaher Corporation (NYSE:DHR) for more defensive posturing.

According to Insider Monkey’s data, 89 hedge funds were long Danaher Corporation (NYSE:DHR) at the end of September 2022, compared to 82 funds in the prior quarter. Dan Loeb’s Third Point is the biggest position holder in the company, with 2.70 million shares worth $697.3 million. 

Here is what Stewart Asset Management has to say about Danaher Corporation (NYSE:DHR) in its Q3 2022 investor letter:

“We also need to point out one global consequence of the rapid rise in interest rates: an irrepressibly strong dollar. This hurts the reported earnings of U.S. companies who sell their goods and services overseas. Foreign currency earnings translate into fewer dollars and thus lower earnings. Most of the companies in your portfolios gain a notable amount of earnings from their international operations. While the strength or weakness of a currency doesn’t change the quality of a business or its longer-term earnings power, it can change the reported earnings of a company over short periods of time. It is difficult to forecast this effect accurately because many of our companies manufacture where they sell, which to some extent dulls the sharp negative effect of a surging dollar. Danaher (NYSE:DHR), among others, is a good example.”

You can also take a look at 10 Best Tobacco Stocks To Buy and 15 Stocks That Members of Congress Own.