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Why You Should Add Boston Scientific (BSX) to Your Portfolio

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Boston Scientific Corporation (BSX - Free Report) has been gaining investor confidence on consistently positive results. Over the past six months, the company’s share price has outperformed its industry. The stock has rallied 23.2% compared with the industry's 5.2% rise. Also, the company has surpassed the S&P 500’s breakeven share performance.

This developer, manufacturer and marketer of medical devices for use in interventional medical specialties has a market cap of $46.6 billion. The company has a long-term historical earnings growth rate of 14.8% for the next three to five years.

With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment. 

The company’s estimate revision trend for the current year has been positive. Over the past 60 days, only one analyst has revised estimate upward while no movement was noticed in the opposite direction. However, earnings estimates remain unchanged at $1.39.

Let’s find out whether the recent positive trend is a sustainable one.

Solid Quarterly Performances

Boston Scientific continues to deliver better-than-expected quarterly earnings and revenue numbers. We are upbeat about the company witnessing growth across all business lines and geographies.

Strategic Buyouts

We are upbeat about Boston Scientific’s recent acquisition of Apama Medical. Through the deal, the company aims at expanding its suite of arrhythmia solutions, fall under its Electrophysiology (EP) sub-segment. Further, to gain traction in the EP market, Boston Scientific announced plans to acquire Securus Medical, a privately-held developer of thermal monitoring system for the continuous measurement of esophageal temperature.

We are also looking forward to the company’s recent agreement for acquiring Cryterion Medical, a privately-held company developing a single-shot cryoablation platform for the treatment of atrial fibrillation. The addition of cryoballoon platform will help Boston Scientific emerge as the first entity with both cryothermal and radiofrequency single-shot, balloon-based ablation therapies in its portfolio.

Geographic Expansion

Boston Scientific’s integral growth strategy is to continue pursuing developmental opportunities outside the United States by expanding its global presence, inclusive of the emerging markets.  The company is gradually fortifying its footprint in the emerging markets including Brazil, Russia, India and China. In first-quarter 2018, business from the emerging markets registered 17% growth.

The company is gaining a strong ground in India as well. It targets about 10 emerging markets for additional stimulus. Boston Scientific hopes to sustain a robust overall international performance riding high on product launches, currently in the early stages of rollout. 

Suspension of MedTech Tax

The decision by the U.S. House and Senate to suspend the medical device tax for another two years has come as a relief to medical device bigwigs like Boston Scientific. Per the company, although temporary, this suspension will allow it to continue with its investment plans in innovative medical products. The company, meanwhile, has plans to work on the full repeal of the MedTech tax.

Other Stocks to Consider

Other top-ranked stocks from the broader Medical space include Genomic Health , Align Technology, Inc. (ALGN - Free Report) and Stryker Corporation (SYK - Free Report) .

Genomic Health has an expected earnings growth rate of 187.5% for the quarter to be reported. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology has a projected long-term earnings growth rate of 28.4% and a Zacks Rank of 2.

Stryker has an estimated long-term earnings growth rate of 9.7% and a Zacks Rank of 2.

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