Having performed extremely well this year, several small-cap stocks in the medical device and supply industry are drawing attention from investors seeking the next big trend. But are these companies seeing enough improvement in their fundamentals to justify the big move?
Despite being highly competitive and fraught with regulatory obstacles, health care is generally seen as recession-resistant. But certain subsectors of health care do better than others. Growth in discretionary medical spending on orthodontics and cosmetic surgery should decline throughout the downturn, for instance, but companies that make tools for more critical procedures could continue growing steadily for years to come.
Just look at some of this year's winners among small-cap medical device and supply manufacturers, compared with the losses of a few key market performers:
Stock
1-Year Performance
EPS Growth Estimate This Year
EPS Growth Estimate Next Year
Orthovita (Nasdaq: VITA)
143%
64%
280%
ICU Medical (Nasdaq: ICUI)
43%
0%
17%
Thoratec (Nasdaq: THOR)
40%
26%
21%
Haemonetics
3%
14%
11%
ev3
9%
123%
263% Continued...