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Cardiology Space Gains Momentum in 2021: 5 Stocks to Focus on

The cardiology device space, traditionally being recognized as one of the most profitable segments of the MedTech sector, has suffered tremendously due to the pandemic. Since the beginning of the pandemic, the cardiology procedure volumes suffered a setback as patients refrained from opting for surgeries due to their fear of getting infected with the virus. The sector, which includes interventional cardiology and heart valve repair or replacement procedures, was also impacted by the reduced hospitalizations to prioritize COVID care.

However, with the slight ebb in the numbers of new COVID infections and increasing attention to non-COVID-care, the cardiology space is likely to turn around. With a potential upside on this front, investors can place their bets on the MedTech sector to reap benefits in the future.

Cardiology Gaining Traction in 2021

Going by an article by Research and Markets, the global cardiovascular devices market was valued at about $45,105 million in 2020 and is expected to see a CAGR of 6.4% between 2021 and 2026. This robust growth is expected to be generated from companies rearranging their operations and recovering from the pandemic-induced impacts.

The cardiac surgery space is also expected to gain tremendously on the back of pent-up demand for elective procedures, which have been delayed since the beginning of the pandemic. Given this, the global cardiac surgery market size is projected to reach over $14.2 billion in 2021 and exceed $20.4 billion by 2027, per a report by iData Research.

In fact, per WHO estimates, cardiovascular diseases (CVDs) are the leading cause of death globally. Further, an estimated 17.9 million people died from CVDs in 2019, representing 32% of all global deaths. Of these deaths, 85% were due to heart attack and stroke. Other factors which are also likely to significantly boost the cardiology care market include pandemic-induced stress, the lockdown-related disappearance of physical exercise options, and the loss of jobs along with the accompanying health insurance, which are likely to take a toll on heart health.

Realizing this growing importance of the cardiovascular care space, MedTech biggies are currently putting their money in new innovation to gain a competitive edge. A notable example in this space is Abbott Laboratories ABT. The company received the CE Mark and Health Canada approval for its Amplatzer Steerable Delivery Sheath in June, which is used with the company's Amplatzer Amulet Left Atrial Appendage Occluder. In May, Abbott received CE Mark for its latest-generation transcatheter aortic valve implantation system, Navitor, making the minimally-invasive device available for people in Europe with severe aortic stenosis who are at high or extreme surgical risk.

5 Stocks to Focus on

Given the overall choppy economic situation, investors should focus on stocks which have held their ground and outshone their respective subindustries despite the challenging business climate.

Here we have picked five cardiology stocks from the MedTech space which have performed impressively in recent times.

The first stock that investors can focus on is renowned medical technology, services and solutions provider, Medtronic plc MDT. This Zacks Rank #3 (Hold) company announced clinical trial results from the STROKE atrial fibrillation (AF) trial this month. The results demonstrated the superiority of the Reveal LINQ Insertable Cardiac Monitor to detect abnormal heartbeats (otherwise known as AF), in both large and small vessel stroke patients unlike standard of care. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Its long-term expected earnings growth rate is pegged at 8.9%. Year to date, the stock has gained 6.9% compared with the industry’s 2.4% rise.

Boston Scientific Corporation BSX is the next stock on the list. The renowned global Zacks Rank #3 medical technology player presented late-breaking registry data from the Early neo2 Registry1 and ITAL-neo Registry2 studies at the EuroPCR 2021 congress. The real-world findings reinforced the effectiveness of the ACURATE neo2 Aortic Valve System, demonstrating low rates of paravalvular leakage and permanent pacemaker implementation compared to the previous-generation ACURATE neo Aortic Valve System.

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Its long-term expected earnings growth rate is pegged at 9.3%. Year to date, the stock has gained 20.6% compared with the industry’s 2.4% rise.

Well-known provider of products and technologies for treating advanced cardiovascular diseases (especially structural heart disease), Edwards Lifesciences Corporation EW, is the next stock in focus. The Zacks Rank #3 company received the FDA’s clearance for its Acumen Hypotension Prediction Index software with the Acumen IQ finger cuff this month.

Zacks Investment ResearchImage Source: Zacks Investment Research

Its long-term expected earnings growth rate is pegged at 15.7%. Year to date, the stock has gained 10.7% compared with the industry’s 1.9% rise.

Next up is Merit Medical Systems, Inc. MMSI, a key manufacturer and marketer of proprietary medical devices. The Zacks Rank #3 company reported robust revenue growth within its Cardiovascular unit in the first quarter of 2021. The enrolment of the first patients in its Wrapsody ArterioVenous (AV) Access Efficacy Pivotal Study (the WAVE study) of the WRAPSODY Endovascular Stent Graft in March is encouraging as well.

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Its long-term expected earnings growth rate is pegged at 12.9%. Year to date, the stock has gained 11.3% compared with the industry’s 8.1% growth.

Renowned global medical technology company, Becton, Dickinson and Company BDX (popularly known as BD), is the final name on the list. The Zacks Rank #3 company, in April, announced the start of enrolment and the treatment of the first patients in the post-market surveillance study, CONNECT-AV.

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Its long-term expected earnings growth rate is pegged at 8.8%. Over the past year, the stock has gained 1.1% compared with the sector’s 3.1% growth.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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