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COPYRIGHT 2002 Adams Business Media
The medical device and technology market offers promise for investors. The aging of the U.S. population, combined with longer life expectancies, is feeding growing demand for products and providing a solid basis for further research.
The medical devices sector exists within an overall market -- health -- that is generally insulated from wider economic trends. And the widespread availability of health insurance means that a greater number of patients can afford the treatment associated with these devices.
"Earnings are strong," says John Putnam, CFA, a senior vice president for Gruntal & Co., in Chicago. "Stocks have held up very nicely. There is not a whole lot of volatility in them."
Putnam also notes that medical devices is one of the few areas of the economy that delivers constant technological advance.
"That," he says, "adds to more stable pricing and more demand, because you've got devices that do things that they didn't two or three or five years ago.
Sandra Hollenhorst, senior medical device analyst for Prudential Securities in Minneapolis, says that the medical device and technology sector meets the need of investors for strong balance sheets and protection against problems in the overall economy.
Hollenhorst agrees that demographics will play a positive part in the development of the market. "These are companies that have very good products," she says. "People need them, whether in good times or bad."
The U.S. population is aging, agrees David Gruber, M.D. Formerly a senior vice president in equity research, covering medical supplies and devices for Lehman Brothers, Gruber is newly a general partner in...
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