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The Top 3 Medical Devices Stocks to Buy Now

There’s also a lot of earnings upside for these companies going forward as many of them had to deal with supply chain constraints and a reduction in e…

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If you are looking for a sector in the market that has been delivering strong performance this quarter, is not tied to the booms and busts of economic cycles, and has plenty of room to grow over the years, the medical devices sector deserves your attention. These are companies seamlessly combining technology and healthcare to improve the way that patients are treated, and there are certainly plenty of intriguing players to choose from in the industry.

With an aging global population and healthcare in the spotlight following the pandemic, the growth catalysts for medical devices stocks are certainly appealing. There’s also a lot of earnings upside for these companies going forward as many of them had to deal with supply chain constraints and a reduction in elective medical procedures last year. All of this adds up to fantastic investment opportunities in the sector, which is why we’ve put together a list of the top 3 medical devices stocks to buy now. Let’s take a further look below.

Bio-Rad Laboratories (NYSE: BIO)

This medical devices stock is quietly outperforming the S&P 500 this year and is up over 36% year-to-date, which is a good indicator of the company’s quality. Bio-Rad Laboratories is a leading provider of life science tools and services with a diverse customer base including pharmaceutical companies, academia, industrial research organizations, government, food producers, and testing laboratories. The company’s business is broken down into two main segments, clinical diagnostics, and life sciences.

Clinical diagnostics includes over 3,000 products that cover more than 300 different clinical tests and delivers strong recurring revenue for the company. The life sciences segment includes products that are primarily used to separate and identify proteins, nucleic acids, and bacteria in a laboratory, which means this company is at the forefront of innovation in healthcare. Both of these business segments should benefit from tons of global healthcare spending going forward, and investors should also be attracted to the company’s 37% stake in German pharmaceuticals and lab equipment provider Sartorius AG, which added $1 billion to Bio-Rad’s net income last quarter.

Thermo Fisher Scientific (NYSE: TMO)

Another top pick for the medical devices sector is Thermo Fisher Scientific, a leading developer, manufacturer, and provider of analytical instruments and complex services for life sciences, drug discovery, and industrial applications. This is the perfect example of a company that actually benefitted from the COVID-19 pandemic, as Thermo Fisher has developed a multitude of testing solutions including instruments, test kits, and reagents to support the global response to the pandemic. The company generated $1.9 billion in Q2 revenue related to the COVID-19 pandemic response, which will likely decline a bit going forward but is still a very impressive figure that confirms just how important this company has been in helping the world get back to normal.

Thanks to this company’s steady operating cash flow and industry-leading position in almost all of its products, Thermo Fisher can reinvest plenty of capital into developing new products and making smart acquisitions. There’s also a lot to like about the company’s Q2 earnings, which included a revenue increase of 34% year-over-year and an adjusted EPS increase of 44% year-over-year. The bottom line is that Thermo Fisher provides medical devices to some of the biggest pharmaceutical companies, hospitals, universities, and government agencies in the world and has a long history of successful innovation, which definitely makes it a top pick in the sector.

This is one of the market leaders in medical devices and a company that is absolutely worth adding to long-term portfolios, particularly when you consider the fact that Medtronic is a dividend aristocrat that has increased its annual payment for the last 44 consecutive years. Medtronic develops and manufactures therapeutic medical devices for chronic diseases, which means that this company’s products have the potential to save lives and improve treatment for individuals around the world. With devices that are used to treat cardiac issues, neurological conditions, and diabetes, Medtronic has a diverse portfolio of dominant products that consistently generate reliable sales.

The company just delivered very strong Q1 financial results that included revenue of $8.0 billion, up 23% year-over-year, and sales growth in all four of the company’s primary business segments. Medtronic also raised its fiscal year 2022 guidance, which is another positive sign that the company is recovering quickly from pandemic-related issues. With several potentially lucrative new product launches to monitor including a robotic-assisted surgery platform called Hugo and a renal denervation program called Micra AV, this is clearly a medical devices stock with immense upside potential.

Originally found on Entrepreneur.com Read More




Three easy ways to start investing

As a Financial Advisor, I get asked a lot of one-off questions from my friends and family members. I want to start this article by saying, that is completely fine, keep asking questions. I truly love helping people any way I can. With that said, you are not really utilizing this relationship to its full potential.  If you have someone in your life that is a Dentist, go get your teeth cleaned a little more often. If your best friend from high school is a Chiropractor, go and get adjusted on a regular basis.  If you have a relationship with a Financial Advisor, schedule meetings with them at least once a quarter, have them build you a financial plan. 

This column is to answer some of those one-off questions I receive from my friends and family.  I get a lot of the same questions.  If the people in my life are asking them, then I am sure a lot of our readers have the same ones. 

This week I am answering one of my favorites…

“Alex, what is the easiest way to start investing?” 

Here are 3 easy ways to start investing:

First, start contributing to your 401k. I know that not everyone has this option, but if you do have a 401k, 403b, or any other kind of work sponsored retirement account, this is a very easy way to invest. Most of these plans are close to free by having very small management fees. If your work offers any kind of matching, you should take advantage of that amazing benefit. A standard saying in my industry is, no financial advisor can beat an automatic 100% growth. That is essentially what is happening with a company match. Let’s say that your company offers a 3% match. If you were making 50k a year, 3% a month would be $125. Your company would be giving you an additional $125 a month through the match.  That’s awesome. Especially when you factor in compounding.  A topic I’ll cover in another article.

Besides a work sponsored retirement account, the second easy way to start investing is to open up an IRA (Individual Retirement Account) or a Roth IRA. A Roth IRA has income limits. You can’t make over $140k/year as an individual or $206/year as a married couple. I am a huge fan of Roth’s for a lot of reasons. The money in a Roth IRA is what we call “after-tax dollars”.  The after-tax-dollars grow tax free. The big benefit of a Roth IRA over either a traditional IRA or traditional 401k, is you won’t have to pay tax on either the initial investment or the growth during retirement. Another way to think of this is, “Would you rather pay tax on the tree or on the seed?”. Let’s look at another hypothetical. If you put $500 a month into a retirement account for the next 30 years and get an average 7% rate of return, you would end up with $614,044. That breaks down to $180,500 that you personally contributed over the years and $433,544 of compounded interest. If this money is in a Roth IRA, at retirement, all of this money is yours. If this is a tax deferred account like a traditional IRA or a 401k, you still have to pay ordinary income tax when you start pulling the money out. Because we don’t know what the tax laws are going to be 30 years from now, it’s impossible to understand what that tax consequence is going to be. For me, I would rather pay the tax now on the $180,500 and not the total $614,044 during retirement.

The third easy way to start investing I want to mention is to open your own individual investment account using one of the many DIY digital platforms out there. I don’t want to mention any by name, because I don’t want that to be misconstrued as a recommendation or endorsement. Most of these platforms have almost no minimum to start. I have a friend who contributes $10/month, and he does it all through an app on his phone. This method is known as dollar cost averaging, which is one way to invest effectively with out trying to time the market, which is something to dive into more in a future article.  My one caveat to this third easy option is that it is great to test out the waters of investing, and it’s fine if it evolves into your “play-money” investing account, but you really want a financial professional to handle your retirement accounts, children’s education accounts, and large investment accounts.

I hope this information helps you out. These are the 3 easiest ways for people to start investing and nothing is stopping you from doing all three.  Many of my clients max out to the matching contributions on their 401k at work, they either have a Roth IRA or a Traditional IRA with me, and they also contribute a few hundred bucks a month into their personal investment app on their phones. The possibilities are endless.

If you would like to talk to me to learn more about any of these tips or to set up a time to have a more comprehensive discussion, I would be happy to talk to you.  

-Alex


Alex Garner is a licensed Financial Advisor, but do not take the information in this article as financial advice.
Examples are hypothetical and for illustrative purposes only. The rates of return do not represent any actual investment and cannot be guaranteed.
Registered Representative, Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, member FINRA/SIPC.
Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Garner Wealth Management LLC and Cambridge are not affiliated.
The information in this article is not financial advice. Diversification and asset allocation strategies do not assure profit or protect against loss. Past performance is no guarantee of future results. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including loss of principal.