Medtronic, Inc. (MDT), Boston Scientific Corporation (BSX): Here Comes the Medical Device Tax

On the other hand, the well-diversified (both product-wise and geographically) industry giants such as Johnson & Johnson (NYSE:JNJ) should be fairly insulated, as should higher-growth companies that are managing to make strong profits already. Intuitive Surgical, Inc. (NASDAQ:ISRG) comes to mind: Although the medical robotics leader will feel a punch from the tax, its string of earnings beats and strong margins should make it a portfolio winner despite the tax.

A good time to check your stocks
The tax bill’s only $97 million now, but it’s going to grow into a monster in the medical device industry before long. You shouldn’t abandon great stocks just because of the hit, but the tax should force you to take a closer look at just how well companies you’ve invested in will handle this latest hurdle. The small players in the medical device industry could face a serious financial blow in the near future — and more layoffs across the sector could be an unfortunate, but necessary, solution to keep profits steady.

The article Here Comes the Medical Device Tax originally appeared on Fool.com and is written by Dan Carroll.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Intuitive Surgical and Johnson & Johnson. The Motley Fool owns shares of Intuitive Surgical, Johnson & Johnson, Medtronic, and Zimmer Holdings.

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