Health Care Equipment

The S&P health care equipment index has underperformed alongside most other long-duration sectors, but the share price ratio has reached a point where buying interest should emerge. Sales have been running at a healthy double-digit clip, and new order growth remains firm, providing…

The previous Insight showed that top-line growth for medical equipment companies was accelerating. It is notable that manufacturers' inventories of medical supplies are contracting at their steepest rate since 2009, which bodes well for factory utilization and pricing power. Moreover, medical…

Health care equipment stocks are pulling back, but this is a correction from overbought levels rather than a trend change. Profit margin prospects remain upbeat. The surge in consumer spending at hospitals has encouraged an expansionist mindset, as highlighted by the surge in health care…

Health care equipment stocks are overbought relative to the broad market, and a corrective pullback is inevitable. We had been concerned that the latest leg up might represent the final outperformance phase for this group, given rising wage inflation and a cooling in revenue growth indicators,…

Shift to a small vs. large cap bias as a stealth way to play the overall equity market overshoot. The oversold bounce in banks is not worth chasing, and buy dips in medical equipment stocks.

A spate of mergers in the medical equipment space has helped propel relative performance to new cyclical highs. In our latest update, we noted our expectation for another upleg, but some niggling concerns about the future revenue outlook caused us to put the group on downgrade alert. However,…

Equities are back in overshoot territory. We added the health care sector to our high-conviction overweight list, boosted managed care to overweight and put health care equipment on downgrade alert. Buy cable stocks.