The orthopedic space within the medical device sector is attracting attention from investors as it begins to show some signs of recovery in its stocks and markets, says Joanne K. Wuensch, a Research Analyst at BMO Capital Markets Corp.
“You’re probably getting some demographic play in there as aging Baby Boomers are crossing over age 65,” she said. “You’re probably starting to get a little bit of play in there from people who, several years ago, put off surgeries and are now starting to come back into the fold.”
Wuensch points to Zimmer Holdings, Inc., (ZMH), a smaller medtech company, due to its decent first-quarter performance. She says she has started to see better knee numbers for the company in the marketplace.
“We’re spending time right now on Zimmer, and if the orthopedic market does truly percolate back, they have almost 80% of their revenues dedicated to hips and knees, and they will benefit. At 11 times 2013 earnings, that seems to be an attractive valuation,” Wuensch said.
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