by
Lynn Shapiro, Writer | February 04, 2009
Besides Abbott and NuVasive, Putnam says Becton Dickinson, which makes syringes and molecular diagnostics; and Haemonetics, a leader in plasma products used in transfusions and in pharmaceuticals, are well positioned.
A Good Time for Takeovers
Given their bargain basement prices, many medical tech start-ups are likely to become prey for larger, cash-rich medical device companies, Putnam says.
For instance, St. Jude recently announced two international medical technology acquisitions for a total of $533 million. And J&J has recently been out on a shopping spree, making several acquisitions since October. The maker of Tylenol is expected to buy more companies in the coming months, now that acquisitions are so cheap.
"With stock market valuations so low, the medical technology group is selling at a price/earnings ratio of 13.4 times earnings, the lowest P/E multiples we can remember in quite a long while," Putnam says. "Meanwhile, the orthopedic device group is selling at 16.8 times earnings; and the cardiovascular group at 14.3 times earnings, both at the low end of their historic valuation ranges.
"For long-term investors, if any still exist, the second half of 2009 could represent an attractive opportunity to develop equity positions in companies with stable earnings prospects and exciting new technologies," Putnam tells DOTmed News.
Important: Opinions in this report are solely those of the subject matter expert quoted and not intended as investment advice.Back to HCB News
