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3 MedTech Stocks to Buy Amid Intensifying Coronavirus Fears
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The world economy has been affected by the coronavirus pandemic on an unprecedented scale. Thus, it comes as no surprise that major world powers including the United States have been easing lockdown restrictions and reopening their economy in order to provide a thrust to the world economy. This rapid reopening of economies is anticipated to spur growth on the back of pen-up demand. However, this reopening can lead to resurgence of COVID-19, which in turn can result in another economic crisis apart from putting the healthcare under pressure.
The International Monetary Fund (IMF) recently slashed its economic forecast again and has warned about a substantial deterioration in public finances as governments try to combat the fallout from this unparalleled biological crisis. Presently, the IMF projects a contraction of 4.9% (lower than the prior estimate of 3% in April) in gross domestic product (GDP) in 2020. The GDP for United States is expected to contract by 8% this year, lower than the previous estimate of 5.9% in April.
While most sectors are struggling to cope with the market turmoil, the MedTech space appears quite resilient on the growing worldwide demand for products and services within this space. Hence, it would be prudent of investors to capitalize on the prospects of this space now.
The Impact of Pandemic on MedTech: Key Takeaways
In the wake of the widespread manufacturing and supply-chain disruptions, most MedTech companies across various domains reported huge revenue losses in the first quarter of 2020. With the U.S. being the biggest single market for several major device makers, the second quarter results are likely to reflect the impact of shutdowns. Notably, recovery across the space is expected in the second half of the year.
Elective and noncritical procedures — lucrative business for MedTech companies — have come under significant pressure due to the pandemic. This disruption is expected to dent MedTech sales in the near term. Robotic Surgery giant, Intuitive Surgical (ISRG - Free Report) , has already witnessed disruptions to procedures and anticipates the procedure volume and system replacement disruption to intensify in the coming quarter.
With health care facilities and first responders looking to free up capacity to diagnose and treat COVID-19 patients, ongoing and prospective clinical trials and product approvals will be delayed. For instance, Abiomed stated that it is hitting the pause button on its STEMI-DTU trial for the Impella heart pump.
However, it is not all bad, as there have been areas where MedTech companies stand to gain.
Companies involved in telemedicine have benefited immensely from this crisis. In this regard, UnitedHealth Group (UNH - Free Report) , which already has several telehealth services including free apps through which virtual consultations can be booked, is a noteworthy name.
Also, prospects of diagnostic testing are immense as some of the key molecular diagnostic players are showing immense potential on account of rigorous work on development of diagnostic testing for the coronavirus and attaining regulatory approvals for them.
Further, demand for medical products such as hospital gowns, masks, gloves, infection prevention kits and ventilators has increased significantly. Henry Schein (HSIC - Free Report) , primarily a distributor of protective equipment, has seen an uptick in demand for masks through its dental and medical distribution business in Asia and the United States.
3 Top MedTech Picks to Add to Your Portfolio Now
QIAGEN N.V. (QGEN - Free Report) : In first-quarter 2020, the company reported sales growth of 9% on a constant currency basis owing to a surge in demand for COVID-19 tests. With the company anticipating sustained growth throughout 2020, it is already aiming for a 50-fold increase in output of viral Ribonucleic acid (RNA) extraction kits to meet rising demand for tests that detect the SARS-CoV-2 virus. The stock sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Year to date, the company gained 26.4% compared with the industry’s growth of 12.1%.
Teladoc Health, Inc. (TDOC - Free Report) : With telemedicine taking significant strides in combatting the outbreak, Teladoc Health has been a frontrunner in this regard. The company has setup an interactive arrangement that allows patients to talk to a U.S. board-certified physician by phone or video in a bid to counter this crisis. Further, it is currently enabling health systems to provide virtual care on a greater scale through the technology and capabilities of both Teladoc Health and its newly-acquired InTouch Health platform.
Year to date, the Zacks Rank #2 (Buy) stock gained 137.5% against the industry’s decline of 3.7%.
In the wake of the coronavirus outbreak, Abbott Laboratories (ABT - Free Report) has made great progress with respect to diagnostic testing. In May, the company received EUA for its SARS-CoV-2 IgG lab-based serology blood test on the Alinity i system. Further, last month, the company received EUA for its molecular test for COVID-19 for use on its new Alinity m molecular lab instrument (approved by the FDA in late March).
Shares of the Zacks Rank #2 company has gained 5.5% on a year-to-date basis, against the industry’s decline of 8.9%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Image: Bigstock
3 MedTech Stocks to Buy Amid Intensifying Coronavirus Fears
The world economy has been affected by the coronavirus pandemic on an unprecedented scale. Thus, it comes as no surprise that major world powers including the United States have been easing lockdown restrictions and reopening their economy in order to provide a thrust to the world economy. This rapid reopening of economies is anticipated to spur growth on the back of pen-up demand. However, this reopening can lead to resurgence of COVID-19, which in turn can result in another economic crisis apart from putting the healthcare under pressure.
The International Monetary Fund (IMF) recently slashed its economic forecast again and has warned about a substantial deterioration in public finances as governments try to combat the fallout from this unparalleled biological crisis. Presently, the IMF projects a contraction of 4.9% (lower than the prior estimate of 3% in April) in gross domestic product (GDP) in 2020. The GDP for United States is expected to contract by 8% this year, lower than the previous estimate of 5.9% in April.
While most sectors are struggling to cope with the market turmoil, the MedTech space appears quite resilient on the growing worldwide demand for products and services within this space. Hence, it would be prudent of investors to capitalize on the prospects of this space now.
The Impact of Pandemic on MedTech: Key Takeaways
In the wake of the widespread manufacturing and supply-chain disruptions, most MedTech companies across various domains reported huge revenue losses in the first quarter of 2020. With the U.S. being the biggest single market for several major device makers, the second quarter results are likely to reflect the impact of shutdowns. Notably, recovery across the space is expected in the second half of the year.
Elective and noncritical procedures — lucrative business for MedTech companies — have come under significant pressure due to the pandemic. This disruption is expected to dent MedTech sales in the near term. Robotic Surgery giant, Intuitive Surgical (ISRG - Free Report) , has already witnessed disruptions to procedures and anticipates the procedure volume and system replacement disruption to intensify in the coming quarter.
With health care facilities and first responders looking to free up capacity to diagnose and treat COVID-19 patients, ongoing and prospective clinical trials and product approvals will be delayed. For instance, Abiomed stated that it is hitting the pause button on its STEMI-DTU trial for the Impella heart pump.
However, it is not all bad, as there have been areas where MedTech companies stand to gain.
Companies involved in telemedicine have benefited immensely from this crisis. In this regard, UnitedHealth Group (UNH - Free Report) , which already has several telehealth services including free apps through which virtual consultations can be booked, is a noteworthy name.
Also, prospects of diagnostic testing are immense as some of the key molecular diagnostic players are showing immense potential on account of rigorous work on development of diagnostic testing for the coronavirus and attaining regulatory approvals for them.
Further, demand for medical products such as hospital gowns, masks, gloves, infection prevention kits and ventilators has increased significantly. Henry Schein (HSIC - Free Report) , primarily a distributor of protective equipment, has seen an uptick in demand for masks through its dental and medical distribution business in Asia and the United States.
3 Top MedTech Picks to Add to Your Portfolio Now
QIAGEN N.V. (QGEN - Free Report) : In first-quarter 2020, the company reported sales growth of 9% on a constant currency basis owing to a surge in demand for COVID-19 tests. With the company anticipating sustained growth throughout 2020, it is already aiming for a 50-fold increase in output of viral Ribonucleic acid (RNA) extraction kits to meet rising demand for tests that detect the SARS-CoV-2 virus. The stock sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Year to date, the company gained 26.4% compared with the industry’s growth of 12.1%.
Teladoc Health, Inc. (TDOC - Free Report) : With telemedicine taking significant strides in combatting the outbreak, Teladoc Health has been a frontrunner in this regard. The company has setup an interactive arrangement that allows patients to talk to a U.S. board-certified physician by phone or video in a bid to counter this crisis. Further, it is currently enabling health systems to provide virtual care on a greater scale through the technology and capabilities of both Teladoc Health and its newly-acquired InTouch Health platform.
Year to date, the Zacks Rank #2 (Buy) stock gained 137.5% against the industry’s decline of 3.7%.
In the wake of the coronavirus outbreak, Abbott Laboratories (ABT - Free Report) has made great progress with respect to diagnostic testing. In May, the company received EUA for its SARS-CoV-2 IgG lab-based serology blood test on the Alinity i system. Further, last month, the company received EUA for its molecular test for COVID-19 for use on its new Alinity m molecular lab instrument (approved by the FDA in late March).
Shares of the Zacks Rank #2 company has gained 5.5% on a year-to-date basis, against the industry’s decline of 8.9%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>