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5 MedTech Outperformers With Nearly 40% or More Gain in 2021

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Following in the footsteps of President Joe Biden administration’s $1.9-trillion financial stimulus sanctioned last month, the recently-submitted discretionary funding request of $1.5 trillion for 2022 is expected to boost sentiments of investors who are keen on the healthcare sector. Unlike the earlier rescue package which did not explicitly focus on healthcare, the latest request is expected to make up for that deficit, if approved.

The proposed funding request is likely to provide $8.7 billion to the Centers for Disease Control and Prevention to enable it to improve its infrastructure capacities apart from grants for expansion of mental healthcare access. The funding request’s focus on health equity and tackling social determinants of health also lift market sentiments. The request also includes a $131.7-billion funding for the Department of Health and Human Services, marking a sharp increment from the 2021 enacted level.

Although the impacts on the U.S. MedTech sector are yet to be seen, the recent focus on the healthcare segment buoys investors’ optimism.

MedTech So Far in 2021

The MedTech sector is still reeling under the impact of the coronavirus outbreak with continued deferrals of elective procedures. With the emergence of the new strain of the virus along with surging cases of infections, the near-term prospects of any turnaround are bleak. Also, the series of financial stimuluses are yet to impact the MedTech sector. Given the scenario till now, it seems that the MedTech subsectors engaged in the non-COVID and elective procedure businesses will have a re-run of their 2020 performances where they were unable to match up to the stellar performances of those into the COVID-19 and non-elective businesses.

A notable example of a company continuing to put up robust performances is renowned diversified health care products provider, Abbott Laboratories (ABT - Free Report) . The company has been seeing improvement in both testing and procedure volumes across its hospital-based businesses. Recently, the company received the FDA’s Emergency Use Authorization for its BinaxNOW COVID-19 Ag Self Test for over-the-counter, non-prescription and asymptomatic use. Year to date, this stock has risen 13.2% compared with the industry’s 5.7% rise.

Meanwhile, renowned dental player Henry Schein, Inc. (HSIC - Free Report) has continued with dismal sales of dental products over the past few months due to the pandemic-led business disruptions. Year to date, this stock has gained 6% compared with the industry’s 8.9% rise.

5 Stocks to Focus on

Given the choppy market situation, investors should turn their focus to stocks which have held their ground and outshone their respective industries despite the challenging business climate.

Here we have picked five stocks from the MedTech space which have gained nearly 40% year to date and have been outperforming their respective industries.

Our first pick is renowned healthcare solutions provider for the diagnosis and treatment of central nervous and sensory system disorders, Natus Medical Incorporated (NTUS - Free Report) . The Zacks Rank #1 (Strong Buy) company, during its fourth-quarter earnings release in February, reported solid sequential revenue improvement despite the challenging business environment.

Its projected earnings per share (EPS) growth stands at a solid 202.6% compared with the industry’s 27.7%. Year to date, the stock has gained 39.5% against the industry’s 0.1% fall. You can see the complete list of today’s Zacks #1 Rank stocks here.

The next stock that that investors can consider is well-known global healthcare solutions company, Owens & Minor, Inc. (OMI - Free Report) . The Zacks Rank #1 company, during its fourth-quarter earnings release in February, reported a solid year-over-year revenue improvement despite the pandemic-led business disruptions.

Its projected EPS growth stands at 46.5% compared with the industry’s 23.1%. Year to date, the stock has gained 39.6% compared with the industry’s 5.7% rise.

Key global healthcare company Penumbra, Inc. (PEN - Free Report) is our next choice. This Zacks Rank #1 company announced the U.S. commercial availability of the Indigo System Lightning 7 in March.

Its projected EPS growth stands at a stupendous level of 639.4% compared with the industry’s 27.7%. Year to date, the stock has gained 63.6% against the industry’s 0.1% fall.

Apollo Medical Holdings, Inc. (AMEH - Free Report) , a key healthcare management company, is our next choice. The Zacks Rank #2 (Buy) company reported impressive revenue growth for the fourth quarter in March despite the pandemic-led choppy business climate. The company also raised expectations of revenue improvement for 2021 based on its recent performance.

Its current cash flow growth stands at 57.9% compared with the industry’s 23.3%. Year to date, the stock has gained 48.5% against the industry’s 0.02% fall.

Our final choice is ENDRA Life Sciences Inc. (NDRA - Free Report) , a renowned company working toward developing technology for increasing the capabilities of clinical diagnostic ultrasound technology. This Zacks Rank#3 (Hold) company recently confirmed making significant progress in the commercialization strategy for its pioneering Thermo Acoustic Enhanced UltraSound (TAEUS) technology and also entered into a collaboration deal with Hepion Pharmaceuticals.

Its projected EPS growth stands at 65.1% compared with the industry’s 27.7%. Year to date, the stock has gained 196% against the industry’s 0.1% fall.

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