2 medical device stocks screaming buys


The medical device industry has caught the attention of investors amid the COVID-19 pandemic. And with the upsurge in COVID-19 cases around the world, the industry could gain traction with investors. According to the WHO, over 11 million new COVID-19 infections were recorded in the past week, representing an increase of 8%.

Additionally, an increasing number of chronic disease patients worldwide, along with an aging population that continues to grow, is expected to drive a continued increase in demand for medical devices. Investor interest in this space is evidenced by iShares US Medical Devices ETFs (IHI) 10.5% returns over the past year.

Therefore, we believe that the shares of fundamentally sound medical device companies ICU Medical, Inc. (ICUI) and Natus Medical Incorporated (NTUS), which are currently trading at discounted prices relative to their peers, could be solid bets at this time. These stocks are rated Strong Buy in our property POWR Rankings system.

Click here to view our 2022 Healthcare Sector Report

ICU Medical, Inc. (ICUI)

Clemente, based in California ICUI, together with its subsidiaries, develops, manufactures and sells medical devices used in infusion therapy and critical care applications worldwide. It is a global leader in high-value infusion systems, infusion consumables and critical care products used in hospitals, alternate sites and home care facilities.

On January 6, 2022, ICUI completed its acquisition of Smiths Medical from Smiths Group plc. Vivek Jain, President and CEO of ICUI, said, “We are delighted to have Smiths Medical now part of ICU Medical, and welcome our new Smiths colleagues to the critical care team. We look forward to working together to continue to deliver quality, innovation and value to our clinical customers around the world. »

For the fourth quarter, ended December 31, 2021, ICUI’s total revenue was $340.52 million, up 6.3% year-over-year. Its gross profit rose 6.4% year-over-year to $127.49 million. Additionally, its adjusted EPS was $1.82, up 2.8% year-over-year.

ICUI 2.33x forward P/Its 55.5% below industry average 5.24x. Additionally, its forecast revenue growth of 25.35% is 82.1% above the industry average of 13.93%.

ICUI’s revenue is expected to increase 81.9% to $2.39 billion in its fiscal year 2022. Its EPS is expected to increase 30.6% year-over-year to $9.65 in 2022. It exceeded EPS estimates in each of the previous four quarters. The stock has gained 12.1% in price over the past month to close yesterday’s trading session at $246.60.

ICUI’s POWR ratings reflect its promising outlook. It has an overall A rating representing a strong buy in our POWR rating system. POWR ratings rate stocks on 118 separate factors, each with its own weighting.

ICUI has a B rating for growth, value, stability and quality. It is ranked #8 out of 168 stocks in the Medical – Devices and Equipment industry. Click on here to see additional POWR ratings for ICUI (momentum and sentiment).

Natus Medical Incorporated (NTUS)

NTUS in Pleasanton, California provides medical device solutions to diagnose and treat central nervous and sensory system disorders worldwide. On February 24, 2022, Thomas J. Sullivan, President and CEO of NTUS, said, “Throughout the year, we have been focused on making our products available to clinicians and despite costs higher by more than $1.7 million in the fourth quarter alone, our non-GAAP earnings per share increased by more than 200%.

For its fourth fiscal quarter, ended December 31, 2021, NTUS’s revenue increased 8.4% year-over-year to $128.66 million. Additionally, its non-GAAP net income was $16.19 million, up 24% year-over-year, while its non-GAAP EPS was 0. $.47, up 20.5% year over year.

NTUS’ forward P/S of 1.78x is 66.1% lower than the industry average of 5.24x. Additionally, its 215.53% year-over-year EBITDA growth is significantly above the industry average of 19.31%.

NTUS’s revenue is expected to reach $495 million in its fiscal year 2022, representing a 4.6% year-over-year increase. Moreover, its EPS is also expected to grow by 22% annually over the next five years. Over the past month, the stock price has gained 12.7% to close yesterday’s trading session at $25.78.

It’s no surprise that NTUS has an overall A rating, which equates to a Strong Buy in our proprietary rating system. Additionally, it has an A rating for growth and value and a B rating for quality.

NTUS is ranked #2 in the Medical – Devices and Equipment industry. Click on here to see additional POWR ratings for NTUS (Momentum, Stability, and Sentiment).

Click here to view our 2022 Healthcare Sector Report

ICUI shares were trading at $244.62 per share on Friday afternoon, down $1.98 (-0.80%). Year-to-date, ICUI has gained 3.07%, versus a -7.06% rise in the benchmark S&P 500 over the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentary. Continued…

More resources for actions in this article


About Author

Comments are closed.