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3 MedTech Stocks for Safe Returns as Hurricane Fears Peak
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An upbeat economic scenario and strong growth in corporate earnings have encouraged investors to load up on U.S. stocks. The Dow Jones Industrial Average’s rise to an all-time high reflects the bullishness.
The ongoing trade tiff between United States and China is less of a concerning factor for most stock-market investors now as the tariff revisions are not as bad as feared. Meanwhile, hurricanes are ballooning into a big concern for investors.
A hurricane season, which typically starts in June and lasts through November, gathers strength in August and September. With Sep 10 marking the peak of the Atlantic hurricane season from a climatology viewpoint, the weeks till mid-October are expected to see a number of additional tropical storms and hurricanes (per an article on AccuWeather).
Though MedTech companies were majorly hit by hurricanes in recent years, let’s take a look at what awaits the sector this season.
Current Scenario & Forecasts
The month of August saw Hurricane Lane rip through Hawaii but its intensity subsided to a Category 3. In September, Hurricane Florence has been a major hurricane (Category 3 or higher).
Now, a team of AccuWeather’s long-range tropical meteorologists, led by Hurricane Expert Dan Kottlowski, is predicting two to four additional tropical storms this year. A couple of these storms may develop into hurricanes, following Tropical Storm Joyce.
Per these experts, five of the 10 tropical storms have turned into hurricanes so far.
Wreckage in the Past
The third quarter generally bears the brunt of unprecedented catastrophes, which cause widespread damage. According to the National Oceanic and Atmospheric Administration (NOAA), Hurricanes Harvey, Irma and Maria together with other natural catastrophes turned 2017 into the most expensive year on record for disasters in the United States (per an article published on The Washington Post). Hurricanes alone in 2017 caused $265 billion of extensive damage.
According to NOAA’s disaster records, Hurricanes Harvey, Irma and Maria deserve a mention in the five most expensive U.S. hurricanes alongside Katrina in 2005 and Sandy in 2012.
The third quarter of 2017 resulted in considerable losses for most MedTech companies, primarily in Florida, Texas and Puerto Rico. MedTech major Medtronic plc (MDT - Free Report) acknowledged the impact of the Hurricane Maria on its quarterly metrics. Hurricane Maria dented its net sales to the tune of $55-$65 million for the three months ended Oct 27, 2017. It also affected Medtronic’s manufacturing operations in Puerto Rico. Boston Scientific (BSX) also had to postpone its manufacturing operations for a week at its Puerto Rican facility.
How is MedTech Gearing Up?
Most MedTech players have been focusing on minimizing the impact of the hurricanes on their top lines. DaVita Kidney Care, a division of DaVita Inc. (DVA - Free Report) , recently announced activating its emergency response plan in North Carolina, South Carolina and Virginia in order to brace Hurricane Florence. These plans aim at proactively dialyzing thousands of patients ahead of the storm in more than 300 centers in roughly 200 cities.
A leading pharmacy benefit manager, CVS Health (CVS - Free Report) and a prominent drug retailer Walgreens Boots Alliance (WBA - Free Report) have been insisting people in endangered zones on refilling their prescriptions.
According to an article published on the Medical Device and Diagnostic Industry (MD+DI), there are certain precautionary steps which the MedTech majors should adhere to before the storms hit.
Per the article, these companies should have transportation contingency plans for disasters which end up harming employees or disrupting conveyance. In addition to this, these companies need to maintain healthy relationships with employment agencies for facilitating faster recruitments in times of emergencies.
Companies should also maintain a thoroughly layered supply chain cycle to keep up production with backup suppliers located away from areas prone to wildfires, earthquakes, tropical storms, hurricanes, or tornadoes. Moreover, a properly screened and selected insurance plan is a requisite.
Safe Picks
For investors interested in investing in the Medical sector, we shortlist companies with solid international business along with a strong Zacks Rank.
California-based Quidel Corporation (QDEL - Free Report) discovers, develops, manufactures and markets point-of-care, rapid diagnostic tests for the detection of medical conditions. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Revenues from the company’s international business accounted for 31% of total revenues in the first half of 2018. Further, the company has started taking all of its European orders though its global ERP system. Per management, the company’s successful integration efforts have been driving global revenues.
The stock has rallied 58.7% in a year’s time.
Headquartered in Sunnyvale, CA, Intuitive Surgical, Inc. (ISRG - Free Report) designs, manufactures and markets the da Vinci surgical system and related instruments and accessories. The company holds a Zacks Rank #2 (Buy).
The company’s procedure volumes outside the United States grew 20% in the first half of 2018, driven by continued growth in da Vinci procedures and earlier stage growth in general surgery, gynecology, and kidney cancer procedures. Notably, the company had received regulatory clearance for the da Vinci X Surgical System in South Korea in September 2017 and in Japan in April 2018.
The stock has gained 63.2% in a year’s time.
Irvine, CA-based Masimo Corporation (MASI - Free Report) develops, manufactures and markets a family of non-invasive monitoring systems. The company has two segments: Product Revenues, Royalty & Other revenues.
Recently, NU Hospitals, a leading nephrology care center in India, has standardized on Masimo technologies across its continuum of care.
In 2017, Masimo had announced the launch and availability of the Rad-97 Pulse-CO-Oximeter and Next generation SedLine Brain Function Monitoring in India.
Apart from India, Masimo’s other major emerging market developments include the implementation of Masimo SafetyNet in two hospitals in Dubai under the governance of the Dubai Health Authority (DHA). Evidently, expanding operations to highly populated economies is likely to fortify the company’s global foothold in the MedTech space.
This Zacks Rank #2stock has rallied 43.5% in a year’s time.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
3 MedTech Stocks for Safe Returns as Hurricane Fears Peak
An upbeat economic scenario and strong growth in corporate earnings have encouraged investors to load up on U.S. stocks. The Dow Jones Industrial Average’s rise to an all-time high reflects the bullishness.
The ongoing trade tiff between United States and China is less of a concerning factor for most stock-market investors now as the tariff revisions are not as bad as feared. Meanwhile, hurricanes are ballooning into a big concern for investors.
A hurricane season, which typically starts in June and lasts through November, gathers strength in August and September. With Sep 10 marking the peak of the Atlantic hurricane season from a climatology viewpoint, the weeks till mid-October are expected to see a number of additional tropical storms and hurricanes (per an article on AccuWeather).
Though MedTech companies were majorly hit by hurricanes in recent years, let’s take a look at what awaits the sector this season.
Current Scenario & Forecasts
The month of August saw Hurricane Lane rip through Hawaii but its intensity subsided to a Category 3. In September, Hurricane Florence has been a major hurricane (Category 3 or higher).
Now, a team of AccuWeather’s long-range tropical meteorologists, led by Hurricane Expert Dan Kottlowski, is predicting two to four additional tropical storms this year. A couple of these storms may develop into hurricanes, following Tropical Storm Joyce.
Per these experts, five of the 10 tropical storms have turned into hurricanes so far.
Wreckage in the Past
The third quarter generally bears the brunt of unprecedented catastrophes, which cause widespread damage. According to the National Oceanic and Atmospheric Administration (NOAA), Hurricanes Harvey, Irma and Maria together with other natural catastrophes turned 2017 into the most expensive year on record for disasters in the United States (per an article published on The Washington Post). Hurricanes alone in 2017 caused $265 billion of extensive damage.
According to NOAA’s disaster records, Hurricanes Harvey, Irma and Maria deserve a mention in the five most expensive U.S. hurricanes alongside Katrina in 2005 and Sandy in 2012.
The third quarter of 2017 resulted in considerable losses for most MedTech companies, primarily in Florida, Texas and Puerto Rico. MedTech major Medtronic plc (MDT - Free Report) acknowledged the impact of the Hurricane Maria on its quarterly metrics. Hurricane Maria dented its net sales to the tune of $55-$65 million for the three months ended Oct 27, 2017. It also affected Medtronic’s manufacturing operations in Puerto Rico. Boston Scientific (BSX) also had to postpone its manufacturing operations for a week at its Puerto Rican facility.
How is MedTech Gearing Up?
Most MedTech players have been focusing on minimizing the impact of the hurricanes on their top lines. DaVita Kidney Care, a division of DaVita Inc. (DVA - Free Report) , recently announced activating its emergency response plan in North Carolina, South Carolina and Virginia in order to brace Hurricane Florence. These plans aim at proactively dialyzing thousands of patients ahead of the storm in more than 300 centers in roughly 200 cities.
A leading pharmacy benefit manager, CVS Health (CVS - Free Report) and a prominent drug retailer Walgreens Boots Alliance (WBA - Free Report) have been insisting people in endangered zones on refilling their prescriptions.
According to an article published on the Medical Device and Diagnostic Industry (MD+DI), there are certain precautionary steps which the MedTech majors should adhere to before the storms hit.
Per the article, these companies should have transportation contingency plans for disasters which end up harming employees or disrupting conveyance. In addition to this, these companies need to maintain healthy relationships with employment agencies for facilitating faster recruitments in times of emergencies.
Companies should also maintain a thoroughly layered supply chain cycle to keep up production with backup suppliers located away from areas prone to wildfires, earthquakes, tropical storms, hurricanes, or tornadoes. Moreover, a properly screened and selected insurance plan is a requisite.
Safe Picks
For investors interested in investing in the Medical sector, we shortlist companies with solid international business along with a strong Zacks Rank.
California-based Quidel Corporation (QDEL - Free Report) discovers, develops, manufactures and markets point-of-care, rapid diagnostic tests for the detection of medical conditions. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Revenues from the company’s international business accounted for 31% of total revenues in the first half of 2018. Further, the company has started taking all of its European orders though its global ERP system. Per management, the company’s successful integration efforts have been driving global revenues.
The stock has rallied 58.7% in a year’s time.
Headquartered in Sunnyvale, CA, Intuitive Surgical, Inc. (ISRG - Free Report) designs, manufactures and markets the da Vinci surgical system and related instruments and accessories. The company holds a Zacks Rank #2 (Buy).
The company’s procedure volumes outside the United States grew 20% in the first half of 2018, driven by continued growth in da Vinci procedures and earlier stage growth in general surgery, gynecology, and kidney cancer procedures. Notably, the company had received regulatory clearance for the da Vinci X Surgical System in South Korea in September 2017 and in Japan in April 2018.
The stock has gained 63.2% in a year’s time.
Irvine, CA-based Masimo Corporation (MASI - Free Report) develops, manufactures and markets a family of non-invasive monitoring systems. The company has two segments: Product Revenues, Royalty & Other revenues.
Recently, NU Hospitals, a leading nephrology care center in India, has standardized on Masimo technologies across its continuum of care.
In 2017, Masimo had announced the launch and availability of the Rad-97 Pulse-CO-Oximeter and Next generation SedLine Brain Function Monitoring in India.
Apart from India, Masimo’s other major emerging market developments include the implementation of Masimo SafetyNet in two hospitals in Dubai under the governance of the Dubai Health Authority (DHA). Evidently, expanding operations to highly populated economies is likely to fortify the company’s global foothold in the MedTech space.
This Zacks Rank #2stock has rallied 43.5% in a year’s time.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>