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Pediatric Medical Space Thrives Amid COVID-19: 3 Stocks in Focus

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The global economy continues bearing the brunt of coronavirus pandemic. Despite a temporary market respite around September, investor sentiment remains largely muted due to resurgence of a fresh wave of COVID-19 cases in several parts of the United States and Europe.

Per a BusinessToday report, the IMF projects a 2020 global GDP contraction of 4.4% in its latest World Economic Outlook.

Overall MedTech Picture

Although worldwide manufacturing and supply-chain disruptions as well as deferral of elective medical/surgical procedures persistently hurt the MedTech sector, several companies started showing signs of a turnaround in their performances eventually, backed by the industry’s indomitable resilience. In the third quarter of 2020, a robust sequential improvement was noted in the performances of several MedTech players, namely Becton, Dickenson and Company (BDX - Free Report) and Abiomed, Inc. (ABMD - Free Report) .

This upside was primarily attributable to the regulatory clearances and launch of several COVID-19 diagnostic tests as well as a strong consumer adoption of digital health options like remote monitoring technologies. With the economy opening up, the gradual revival of market demand for the non-COVID product portfolio of these device makers is also helping them recover from the pandemic lows. This momentum is expected to continue well into the fourth quarter of the year for several MedTech players.

Among several domains within the MedTech space, the performance of pediatric medical device companies has stood out amid the pandemic so far.

Pediatric Medical Space Amid COVID-19

At the peak of the pandemic, the global pediatric medical devices market was propelled by the rising occurrence of respiratory diseases among children, increasing number of children with heart diseases and the growing incidences of pediatric diabetes. The pandemic-induced lockdown resulted in school shutdowns, social distancing and home-confinement measures, which in turn, aggravated the risk of malnutrition among children. The urgency to minimize exposure to the coronavirus fueled massive demand for remote-monitoring options among pediatric patient population.

In pediatric dentistry too, following the initial cancellation of routine operations, the industry is in a recovery mode and is facing huge pent-up demand leading to fast expansion of dental practices.

3 Stocks in Focus:

Here we shortlisted three pediatric medical device stocks with a Zacks Rank #2 (Buy) and 3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Abbott Laboratories (ABT - Free Report) : This currently Zacks Rank #3 company’s third-quarter U.S. sales from its Pediatric Nutrition business were driven by growth in Pedialyte, which is its oral rehydration brand, as well as strength of its other brand, PediaSure. Internationally, the segment reported growth in Southeast Asia.

Over the past six months, shares of the company have outperformed the industry. The stock has gained 17.7% compared with the industry’s 9% growth.

Medtronic plc (MDT - Free Report) : This presently Zacks #3 Ranked company’s CARPEDIEM System, a new device for continuous dialysis therapy in pediatric patients with certain kidney conditions, was granted a marketing approval by the FDA in April 2020. The system is designed to provide continuous hemodialysis or hemofiltration therapy to critically ill pediatric patients weighing between 2.5 kilograms and 10 kilograms.

Over the past six months, shares have outperformed the industry. The stock has rallied 18.3% compared with the industry’s 8.9% growth.

Align Technology (ALGN - Free Report) : This currently Zacks #2 Ranked company recently integrated the iTero intraoral scanner within its pediatric dental and orthodontic practice. In the third quarter, Invisalign First continued to witness a solid traction among the pediatric patient population.

Over the past six months, the company’s shares have outperformed the industry. The stock has soared 82.4% compared with the industry’s 11.1% growth.

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