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Orthopedic Space Gains Momentum in 2021: 5 Stocks in Focus

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Orthopedic Device, an integral part of MedTech, was reeling under the pandemic wave through 2020 due to limited and restricted social-distancing measures, fewer hospital visits, remote working and deferral of non-COVID procedures. This subsector, which covers orthopedic implants, minimally-invasive surgeries and robotic surgeries, had been significantly battered by the unrelenting spread of the pandemic.

However, the situation is seemingly promising in 2021 with potential upside thereafter. For investors keen on placing a bet on the MedTech space, the orthopedics market undoubtedly holds immense potential now.

Let us delve deeper.

Orthopedics Gaining Traction in 2021

Going by an article called “Orthopedic Devices Global Market Report 2021” by Reportlinker, the global orthopaedic device market is expected to rise from $42.7 billion in 2020 to $49.59 billion in 2021, at a CAGR of 16.1%. This robust growth is expected to be generated from companies rearranging their operations and recovering from the COVID-19 impact.

Also, huge pent-up demand for orthopaedic surgeries is expected from patients worldwide in 2021. The market is expected to reach $61.08 billion in 2025, at a CAGR of 5%.

Meanwhile we note that, among all the orthopaedic device wings, robotic surgery has been gaining prominence faster. A major bonus of the robotic surgery is the lesser utilization of hospital resources along with minimal patient contacts and exposure to the virus. This type of surgery not only enhances patient outcomes and minimizes costs but also reduces postoperative recovery time, immediate post-surgical pain and infection rates as well as lowers complication rates.

A notable example in this subsector is NuVasive, Inc. (NUVA - Free Report) , a well-known player in the global spine space. The company, despite continuously putting up disappointing performances over the past few months due to adverse impacts on its global elective surgical volumes, is gradually gaining strength. Its robust product pipeline and the recent Simplify Medical buyout raise investors’ hopes on a strong performance in the upcoming months. Year to date, this stock has risen 23.3% compared with the industry’s 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 subindustries despite the challenging business climate.

Here we have picked five orthopedics stocks from the MedTech space which have performed impressively year to date.

Our first choice is well-known orthopedics and tissue technologies player, Integra LifeSciences Holdings Corporation (IART - Free Report) . This Zacks Rank #3 (Hold) company completed the buyout of ACell, Inc. in January. This enabled Integra to integrate ACell’s proprietary MatriStem UBM technologies to provide more comprehensive complex wound management solutions. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Its long-term expected earnings growth rate is pegged at 13.2%. Year to date, the stock has gained 14.5% compared with the industry’s 2.9% rise.

Renowned medical technology company which is into development and sales of joint replacement implants and instruments, Conformis, Inc. (CFMS - Free Report) , is our next choice. The Zacks Rank #3 company entered into a license agreement with Paragon 28, Inc. this month, granting the latter a non-exclusive license for the use of patient-specific instruments with off-the-shelf implants in Paragon 28’s APEX 3D Total Ankle Replacement System.

Its projected EPS growth for 2021 stands at 40.2%. Year to date, the stock has gained 22.8% compared with the industry’s 2.9% rise.

SeaSpine Holdings Corporation (SPNE - Free Report) , a well-known global medical technology company focused on the treatment of spinal disorders, is our third choice. This Zacks Rank #3 company announced the limited commercial launch of its 3D-printed WaveForm TO (TLIF Oblique) Interbody System this month.

Its projected EPS growth for 2021 stands at 23.4%. Year to date, the stock has gained 20.4% compared with the industry’s 2.9% rise.

The next stock that investors can a look at is key musculoskeletal healthcare player, Zimmer Biomet Holdings, Inc. (ZBH - Free Report) . The Zacks Rank #3 company introduced the ZBEdge Connected Intelligence Suite of currently available and soon-to-be-launched digital and robotic technologies in March.

Its long-term earnings growth rate is estimated at 8.9%. Year to date, the stock has gained 14.6% compared with the industry’s 9% rise.

Our final pick is global medical device and biologics company focused on spine and extremities, Orthofix Medical Inc. (OFIX - Free Report) . This Zacks Rank #3 company announced the FDA’s 510(k) clearance and the first patient implant of the 3D-printed CONSTRUX Mini Ti Spacer System. Notably, the CONSTRUX Mini Ti cervical spacer with Nanovate Technology, the first 3D-printed titanium interbody by Orthofix, is expected to enhance anterior cervical discectomy and fusion procedures.

Its projected EPS growth for 2021 stands at 98%. Year to date, the stock has gained 5.3% compared with the industry’s 2.9% rise.

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