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4 MedTech Stocks Momentum Investors Will Love

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The global economy has witnessed a roller-coaster ride over the past month, primarily due to China’s massive currency devaluation coupled with the persistent slump observed in world oil prices. This had pushed the world stock market to the wall. However, the world market has somewhat taken a turn for the better over the past week as is evident from yesterday’s hike in global stock prices.

While plenty speculation is going on whether Fed will hike the interest rate today or postpone it for now, the market seems to have taken the matter positively. The 140-point jump in yesterday’s Dow Jones industrial average and the 17.2-point rise in the S&P 500 index indicate that market assumes rate hike may get suspended for the time being. Or else investors may also feel that, even if Fed decides to increase rate, it will hardly have any impact over the long term.

Nevertheless, it would be rather foolishness to claim that all of a sudden volatility has vanished from the market, just because the world market has started to recover yesterday onward. No doubt, such market uncertainty has made investors increasingly cautious about spending on stocks.

Interestingly in this phase of massive global sell-offs, the MedTech sector has not only held its own, but also maintained a stable uptrend. This is based on some of its powerful long-term tailwinds, including mergers & acquisitions, emerging market expansion, positive demographic trends and innovation of new products.

In fact a closer look at this sector’s history will reveal the companies’ undaunting spirit to expand their business whatever the market scenario is. Despite the measures adopted by Obama government, we have witnessed some big cross-border mergers last year – the most significant one being the take over of Covidien by MedTech giant Medtronic and the impending acquisition of Italy-based Sorin by Cyberonics.

In recent times, in the wake of the world market volatility, we witnessed some of this sector’s major players to play key role in market expansion, including the buyout of Sirona Dental by Dentsply for $5.5 billion and the $3.4 billion buyout of Thoratec Corp. by St. Jude Medical.

Amid the present volatility across the global economy, we have found a handful of top Zacks Rank momentum stocks for you from the Medical Instrument industry (one of the 4 industries of the MedTech sector) that are going to gain from this share market turbulence. With a Style Score of “B” or better combined with favorable Zacks Rank #1 or #2 and a market cap of more than $100 million, these stocks are looking especially impressive right now.

Impressively, the medical instruments industry currently holds an impressive Zacks Industry Rank #73 (As a guideline, the outlook for industries with Zacks Industry Rank of #88 and lower is 'Positive.’ To learn more, visit: About Zacks Industry Rank.)

Below we have cited 4 stocks that are worth a look before you invest:

Thermo Fisher Scientific (TMO - Free Report) : Expansion through M&A is one of the primary strategies played by this Massachusetts-based scientific instrument manufacturer. Apart from the $13.6 billion Life Technologies acquisition (Feb 2014), the company’s most recent buyouts include the impending purchase of U.K.-based research chemical manufacturer, Alfa Aesar and Advanced Scientifics. The metrics that make this leading scientific instrument provider all the more desirable are:

  • Momentum Score of “A”
  • Zacks Rank #2 (Buy)
  • Market Cap: $49.85 billion.

Cyberonics : Cyberonics is a medical technology company with core expertise in neuromodulation. The $2.7 billion Sorin merger — expected to be over by Sep 22, 2015 — is likely to expand Cyberonics’ epilepsy business outside the U.S. The metrics that make the company more attractive are:

  • Momentum Score of “A”
  • Zacks Rank #1 (Strong Buy)
  • Market Cap: $1.76 billion

Intuitive Surgical (ISRG - Free Report) : This California-based medical device developer manufactures the da Vinci surgical system – an advanced robot-assisted surgical system. The latest version of the company’s da Vinci Xi robotic surgical system has longer instrument shafts enabling greater reach for surgery. The metrics that make this company all the more desirable are:

  • Momentum Score of “B”
  • Zacks Rank #2
  • Market Cap: $19.02 billion

Natus Medical : Natus is a leading provider of newborn care and neurology healthcare products and services. The company’s five-year Hearing Screening Coordination contract worth $32.5 million with the State of California is expected to position the company for accelerated revenue growth and record earnings in 2015. The metrics that make Natus an attractive choice are:

  • Momentum Score of “B”
  • Zacks Rank #2
  • Market Cap: $1.36 billion

Bottom Line

You can find stocks with good momentum scores any time of the year, but the present market scenario makes the task a little difficult. All of the aforementioned stocks may not be big, but they certainly make a bang in the MedTech sector. If the worldwide bullish market continues for a few more days, these stocks have a high chance of performing well in the near future.  

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