The Zacks Analyst Blog Highlights: St. Jude Medical, Boston Scientific, Medtronic, Intuitive Surgical and Thermo Fisher Scientific - Press Releases

An image of a person going over a financial report
Credit: Shutterstock photo

For Immediate Release

Chicago, IL - December 22, 2011 - announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include St. Jude Medical ( STJ ), Boston Scientific ( BSX ), Medtronic ( MDT ), Intuitive Surgical ( ISRG ) and Thermo Fisher Scientific ( TMO ).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter:

Here are highlights from Wednesday's Analyst Blog:

New Year Bets in MedTech

Picking the right stock is never easy, especially in a difficult and volatile market. There are thousands of stocks to choose from and many investors eventually end up boiling the ocean.

The U.S. economy continues to be cramped by a spate of headwinds including a still unstable job market, high debt, a soft housing sector and last but surely not the least, the European sovereign debt contagion, which have hit industries across the board. The recent EU summit did not bring out any concrete solution to staunch the debt crisis which began in Greece in 2009.

The healthcare sector, traditionally revered as a safe haven for investors and one of the most preferred areas to take cover in the midst of market volatility, has been somewhat proved not immune to the global economic tumult as several leading players looked to be out of favor, making many investors skittish about these stocks.

Yet, year-to-date, the health care sector has outperformed the S&P 500 (up 8.35% versus a 1.3% loss for the S&P 500). So, where are we heading in 2012?

Patchy Year but Better Days Ahead

Like 2010, this year proved to be challenging for MedTech stocks given the exigent economic conditions and a precarious healthcare environment. The industry is hamstrung by several issues, including pricing concerns, hospital admission and procedural volume pressures, uncertainty surrounding healthcare reform, Medicare reimbursement issues (including concerns over the new pre-payment review program) and regulatory overhang (overhaul in the device approval process), which have left many investors scratching their heads.

With fewer patients going under the knife accompanied by concerns of overuse of devices, companies in cardiovascular and orthopedic domain had gone through a rough patch in 2011.

Yet, the MedTech industry weathered the economic vortex better than many others and is emerging as an important contributor to economic recovery. Although the sector is still weighed down by the macro mayhem, the industry is expected to fare relatively better next year thanks to several attractive growth opportunities and healthy tailwinds (includes improving hospital spending, emerging markets and pent-up demand).

Strike While the Iron is Hot?

Given the industry headwinds, many stocks in the MedTech universe are trading close to their 52-week low and under the analysts' median price target. Some of the stocks are also trading below their 50-day and 200-day moving averages. Many of them have lost a third of their valuation this year.

The pullback bestows an entry point for investors to grab some quality stocks in this sector with attractive prospects that augur well for long-term growth. As Peter Lynch said, "I've found that when the market's going down and you buy funds wisely, at some point in the future you will be happy."

Which Stocks to Choose?

As we all brace ourselves for 2012, here's some food for thought on picking value MedTech stocks for the new year. Going into 2012, we advocate companies providing life-sustaining products and procedures, given their healthy recurring revenue stream.

Further, investors should look for stocks with strong earnings quality, healthy growth trajectory, and liquidity profiles as they appear attractive considering their ability to leverage strong balance sheet and cash flows in maximizing shareholder value in form of dividends and share repurchases or use them for value acquisitions.

MedTech Companies with vast product range/healthy pipeline and strong infrastructure are also better poised for improved returns. Moreover, companies focusing on more judicious R&D investment, expansion into new markets and cost-saving through restructuring are better placed for 2012.

Moreover, investors could also scoop up low-beta stocks (beta less than 1) in the current rickety market environment. Companies with low beta are less volatile than the overall market and hence are considered defensive stocks with low risk. Moreover, stocks with healthy dividend yields offer a cushion against market volatility.

Top Picks for 2012

St.Jude Medical ( STJ ): It is better placed among the top-tier, pure play medical devices stocks in the cardiovascular arena. The company has a number of levers to pull and represents a good bet for long-term investors. St. Jude is consistently producing positive earnings surprises and healthy revenue growth and is poised for growth on the back of strong cadence of new products (including the quadripolar pacing system).

BostonScientific ( BSX ): The numero uno in the drug eluting stent ("DES") market. The earlier-than-expected recent approval of the next-generation DES product Promus Element coupled with a new line of ICDs better places the company for 2012. Moreover, Boston Scientific is expanding its footprint in the emerging markets for growth and maintains a positive earnings surprise streak.

Medtronic ( MDT ): It is the largest medical devices company on the planet. Despite weaknesses in its key ICD and spinal implants businesses, we like the company's efforts to augment/diversify its product range, expand into emerging markets for growth, strong cash and healthy dividend yield. Besides, the new MRI SureScan pacemaker and Protects ICDs should offer support to its core CRDM segment.

Intuitive Surgical ( ISRG ): Robotic surgery is another area which appears to be better placed for growth in 2012 and Intuitive clearly leads the pack with its state-of-the-art technology. Intuitive enjoys a virtual monopoly in robotic surgery and continues to deliver forecast-topping earnings. Its sales are growing at a torrid pace buoyed by the da Vinci surgical system.

Thermo Fisher Scientific ( TMO ): The leading, diversified scientific instrument maker has been successful in expanding operating margins over the past few quarters on the back of operational efficiency and cost discipline. It has strong international exposure and is focusing on acquisitions and emerging market for growth.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: .

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today:

About Zacks is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at .

Visit for information about the performance numbers displayed in this press release.

Follow us on Twitter:

Join us on Facebook:

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

BOSTON SCIENTIF ( BSX ): Free Stock Analysis Report

INTUITIVE SURG ( ISRG ): Free Stock Analysis Report

MEDTRONIC ( MDT ): Free Stock Analysis Report

ST JUDE MEDICAL ( STJ ): Free Stock Analysis Report

THERMO FISHER ( TMO ): Free Stock Analysis Report

To read this article on click here.

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

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

In This Story


Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More