Good Friday is officially a holiday for the Wall Street and the U.S. stock exchanges. Except for three occasions (per Bloomberg 1898, 1906 and 1907), the New York Stock Exchange – the largest and one of the oldest exchanges of the world – has always closed on this day.
It is interesting to note that the Friday preceding Easter weekend is the only non-federal holiday on which NYSE remains closed. Although 2015 is not going to be an exception, the Labor Department’s decision to release its all-important monthly employment report will keep investors on the lookout for a better opportunity to enter the market in the next trading session.
Healthcare presents significant growth opportunity for investors. Per Factset data quoted by MarketWatch, year-to-date return for the Healthcare sector stands at 6.2% followed by consumer discretionary at 4%. It is worth noting that Healthcare was the second strongest sector in 2014 (23% return) and only lagged Utilities (24% return) by a slim margin.
Among healthcare sub-sectors, managed healthcare, biotechnology, healthcare services and medical devices are expected to perform well in the near term. We favor medical devices (equipment and instruments) companies owing to their growing importance in maintaining standard of healthcare in a cost-effective way.
The growing demand for minimally invasive technologies, in-vitro diagnostic (“IVD”) products, discrete and multiplexed assays, molecular diagnostics tools among others are key growth catalysts in our view. An aging demography is expected to boost demand for orthopedic and cardiovascular implants as well as intervertabral spacers, orthobiologics, cardiac pacemakers and many more.
Here we present 4 top-ranked stocks that sport favorable characteristics to outperform:
Inogen (INGN - Free Report)
This Goleta, CA-based company offers innovative respiratory products for use in the homecare setting. Inogen’s unique direct-to-customer (DTC) business model, innovative product portfolio, growing patient base, increasing international sales and expansions are expected to boost top-line growth.
Zacks Rank #1 (Strong Buy)
Long-term EPS growth: 21%
Estimate Revision (F1): 4.8%
Edwards Lifesciences Corp (EW - Free Report)
This Irvine, CA-based company is a leading player in the field of heart valve therapy. With an increase in aging population, the number of people with cardiovascular disease is likely to grow manifold. Edwards Lifesciences is currently well placed and should be poised even better in the future to serve this market with its leading minimally invasive technologies.
Zacks Rank #2 (Buy)
Long-term EPS growth: 15.1%
Estimate Revision (F1): 4.5%
Luminex Corp. (LMNX - Free Report)
This Austin, TX-based company’s open-architecture multiplexing xMAP (Multi-Analyte Profiling) technology is sold worldwide. 2015 will be a key transitional year for Luminex as it prepares for the launch of ARIES as well as its new multiplexing Assay NxTAG RPP (Respiratory Pathogen Panel). While ARIES is positioned to target the low-plex testing market, NxTAG RPP eyes the moderate to high volume labs in the multiplex market.
Zacks Rank #2 (Buy)
Long-term EPS growth: 18.8%
Estimate Revision (F1): 4.1%
RTI Surgical (RTIX - Free Report)
This Alachua, FL-based company offers orthopedic and other surgical implants that repair and promote the natural healing of human bone and other human tissues. The company’s expanding product portfolio that comprises sports medicine, spine, orthofixation, and BGS & general orthopedic market is a key growth driver.
Zacks Rank: #2 (Buy)
Long-term EPS growth: 15%
Estimate Revision (F1): 17.6%
Despite reimbursement-related concerns, 2015 is forecasted to be a transition year for the medical devices sector. Healthcare providers are expected to spend more on the backdrop of an improving U.S. economy, which will eventually drive top-line growth. Additionally, the ongoing legislation to repeal a much debated 2.3% federal excise tax under Obamacare is good news for these companies, as it will boost earnings significantly.