Industry Analysis: Medical Supplies
September 14, 2003
Summary:
Pros:
- Industry profits are rising.
- U.S. and international populations are
aging, increasing demand.
- Industry tends to do comparatively well
during economic downturns.
Cons:
- If the economy heats up, the medical
supplies industry will likely lag other industries.
Bottom Line:
With the unstable U.S. economy and positive
demographic trends, the medical supplies industry should outpace
most other areas. Your portfolio should definitely have exposure
to this industry.
Recommended stocks:
- Highest recommendation (rated* A+): this
particular stock is included in our Primary Stock Portfolio
and is reserved for subscribers only.
- Second highest recommendation (rated*
A): this particular stock is included in our High-Dividend
Blue Chip Stock Portfolio and is reserved for subscribers
only.
- Third highest recommendation (A-): Young
Innovations Inc. (Ticker: YDNT)
- Fourth highest recommendation (A-): INAMED
Corp. (Ticker: IMDC)
Details:
With the aging U.S. population comes stronger
demand for medical supplies. This is evidenced by the rising
profits that these companies have been enjoying. It's also
experiencing consolidation. With the economy still a bit shaky,
this industry is a good place for a portion of your portfolio
since it tends to do well in bad economic times. If you don't
have at least one of the companies listed in our industry
directory below, we suggest you make room.
There are four stocks within the industry
that receive our "A" rating*, including a rare A+,
of which we currently give to only 24 stocks of the thousands
that are publicly traded.
Stocks rated A+:
This rare A+ stock is included in
our Primary Stock Portfolio
and is reserved for subscribers
only.
Stocks rated A:
This stock is included in our High-Dividend
Blue Chip Stock Portfolio and is reserved for subscribers
only.
Stocks rated A-:
Young
Innovations Inc.
(Ticker: YDNT)
This tiny company ($278 million market cap) develops, manufactures
and markets supplies and equipment used by dental practices
and consumers. Due to improved gross profit, the firm's revenues
increased 6% while net income rose 16% for the last reported
six-month period. Additionally, the company's P/E ratio, price
to sales, price to free cash flow, and long-term debt all
compare very favorably to the industry. For investors seeking
micro-cap exposure to the medical supplies industry, we highly
recommend this company.
INAMED Corp.
(Ticker: IMDC)
INAMED's product lines include facial implants, breast implants,
and a less invasive alternative to gastric bypass surgeries.
Recent sales, of which 38% are generated abroad, have jumped
20%. Being almost six times the size of Young Innovations,
INAMED is recommended for investors wanting small-cap exposure
to the medical supplies industry.
Stocks rated B+:
Advanced Neuromodulation Systems, Inc.
Biosite, Inc.
Bio-Rad Labs
ResMed Inc.
| Next:
Medical Supplies Industry Directory |
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*Note: our ratings for stocks are the same
as letter grades associated with American schools. The highest
is A+ and the lowest is F.
|
