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5 Soaring MedTech Stocks to Buy for More Growth in 2021

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Through 2020, the MedTech industry faced a sizable drop in elective and non-COVID-19 procedures. However, the tables turned in the second half of 2020. This change came on the back of the launch of several COVID-19 diagnostic tests, shift of consumer preferences toward digital healthcare options as well as a steady uptick in emergency medical procedures.

Major MedTech players like Abbott Laboratories (ABT - Free Report) in particular reported a significant sequential rebound in its third-quarter 2020 performances.

Demand for diagnostic tests reached a record level this year, translating into all-time highs for makers of these tests. We may take the example of diagnostic testing majors, Quest Diagnostics and its peer LabCorp. In the course of expanding their COVID-19 testing capacities, these stocks reached their all-time highs of $131.81 and $218.77 on Aug 3 and Nov 5, respectively. Further, Hologic (HOLX - Free Report) , banking on its significant progress in the line of SARS-CoV-2 based molecular diagnostic testing, reached an all-time high of $76.67 on Nov 5.

The MedTech-loaded ETF Index iShares U.S. Medical Devices (IHI) has witnessed 22.7% rise in the year so far. SPDR S&P Health Care Equipment ETF (XHE) has gained 31.6% in the said time frame.

MedTech Growth Stocks to Buy for 2021

Overall, MedTech stocks have adjusted their business models over the past few months and in fact have already started to recover and approach pre-COVID levels. Although it will take some time for the companies to reach the pre-COVID levels of business, it is heartening to witness the steady progress.

As we enter 2021, investors can now choose to invest in stocks, which held their ground amid choppy market conditions and have strong growth potential.

We have selected stocks with more than $1 billion of market cap and carrying a Growth Score of A or B. Our research shows that stocks with a Growth Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best upside potential. You can see the complete list of today’s Zacks #1 Rank stocks here.

YTD Price Comparison

The first on our list isimmunodiagnostics and molecular diagnostics tests player, DiaSorin (DSRLF - Free Report) . Despite initial setback, the company is currently witnessing strong recovery both in the United States and Europe. Particularly, the COVID-19-led serology and molecular diagnostic testing business is doing extremely well for the company. The company presently carries a Zacks Rank #1 and has a Growth Score of A. Its projected earnings per share (EPS) growth for 2021 stands at a solid 63.1% compared with the industry’s projection of 25.3%. Year to date, the stock has gained 56.6%.

Our next pick is generators, masks, and related accessories maker, ResMed (RMD - Free Report) . The company saw significantly ramped-up demand for its critical care products through 2020. Accordingly, it has scaled up production of ventilators, masks and other respiratory devices since March. Per the company, it generated an incremental revenue benefit from ventilator devices and related accessories due to COVID-19-related demand of approximately $40 million. The company carries a Zacks Rank #2 and has a Growth Score of A. Its projected EPS growth for fiscal 2021 (ending Jun 2021) stands at 9% compared with the industry’s projection of 8.4%. Year to date, the stock has gained 36.3%.

The third stock on our list is Owens & Minor (OMI - Free Report) : This healthcare solutions company exhibited improved results courtesy of increased productivity, higher manufacturing output related to personal protective equipment (PPE), favorable revenue mix, and continued execution and delivery of operating efficiencies for the greater part of 2020. The stock sports a Zacks Rank #1 and has a Growth Score of A. Its projected EPS growth for 2021 is 11.3%. Year to date, the stock has gained 443.9%.

Next up is leading companion animal veterinary, livestock and poultry, dairy and water testing markets player, IDEXX Laboratories (IDXX - Free Report) . The company is witnessing sturdy gains in CAG Diagnostics recurring revenues, supported by high organic gains in both the United States and International markets. Further, the company’s human health business, OPTI Medical Systems’ COVID-19 human Polymerase Chain Reaction (PCR) testing is also contributing to the top line. The company presently carries a Zacks Rank #2 and has a Growth Score of B. Its projected earnings per share (EPS) growth for 2021 is 11.4%. Year to date, the stock has gained 89.2%.

Our final pick is Sonova Holding (SONVY - Free Report) . The company is a provider of hearing systems for adults and children with hearing impairment. It offers wireless communication products, rechargeable hearing aids, and professional audiological care services. The stock carries a Zacks Rank #2 and has a Growth Score of B. Its projected EPS growth for fiscal 2022 (ending Mar 2022) is 38.8%. Year to date, the stock has gained 14.5%.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>