Click here to close now.




















Welcome!

News Feed Item

Zacks Industry Outlook Highlights: BostonScientific, Medtronic, St. Jude Medical, Stryker and Quest Diagnostics

CHICAGO, Jan. 8, 2014 /PRNewswire/ -- Today, Zacks Equity Research discusses the Medical Technologies , including Boston Scientific Corporation (NYSE:BSX-Free Report), Medtronic Inc. (NYSE:MDT-Free Report), St. Jude Medical, Inc. (NYSE:STJ-Free Report), Stryker Corporation (NYSE:SYK-Free Report) and Quest Diagnostics (NYSE:DGX-Free Report).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Industry: Medical Technologies

Link: http://www.zacks.com/commentary/30751/medtech-industry-stock-update---jan-2014

We are on the verge of the Q4 earnings season and it is once again time to review the players in the worldwide medical devices market. For the U.S. medical device industry, spending cuts and higher taxes have been a big issue lately. The industry faced sequestration related spending cuts to the U.S. federal budget and the 2.3% medical device excise tax.

Unfortunately, this is not the end of the story. This year, more spending cuts are scheduled to take place which will last through 2021. The sequestration which resulted in a 5.5% cut in the National Institutes of Health's (NIH) fiscal 2013 budget resulted in 640 fewer grants in 2013.  

The NIH was not the sole victim of federal budget austerities. In 2013, under the sequester, there was a 5% cut in the Centers for Disease Control and Prevention's budget, another 5% cut to the U.S. Food and Drug Administration's fund and a 2% cut in Medicare funding that included cut in payments to hospitals, physicians, other medical providers, Medicare Advantage insurance companies and Part D prescription drug plans.

Unless repealed or replaced, NIH apprehends sequestration to take a worse shape in 2014 leading to serious consequences like delaying progress in medical breakthroughs, deterioration in job creation and tempering of economic growth. An NBC news article recently noted that many new researchers, who were trained with the U.S. taxpayer's money, may have to move to Europe and Asia where government funding for medical research is on the rise.

On top of these, the Obamacare's medical device excise tax is taking a heavy toll on the MedTech sector, hurting pricing decisions of companies and subjecting them to tremendous margin pressure. The small and the medium-sized players in the sector (comprising about 80% of the industry) are the worst hit by this public policy. The devastating 2.3% excise tax (effective Jan 2013), which is imposed on the sale price instead of net profit, amounts to a stupendous sum, wiping out almost a quarter of the profit at the med instrument owners.

Conversely, the big players are trying every means to change their business model and cost structure to accommodate the excise tax. They are undertaking various restructuring initiatives to counter costs incurred from the implementation of the new tax. Restructuring especially to offset the effect of the excise tax has already been adopted by key players, such as, Boston Scientific Corporation (NYSE:BSX-Free Report), Medtronic Inc. (NYSE:MDT-Free Report), St. Jude Medical, Inc. (NYSE:STJ-Free Report), Stryker Corporation (NYSE:SYK-Free Report) and Quest Diagnostics (NYSE:DGX-Free Report). The companies are also trying to focus on strategic mergers and acquisitions (M&A), emerging market expansion or are reducing operations in order to weather the tax burden.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time!  Click here for your free subscription to Profit from the Pros.

Get the full Report on BSX- FREE

Get the full Report on MDT - FREE

Get the full Report on STJ - FREE

Get the full Report on SYK - FREE

Get the full Report on DGX - FREE

Follow us on Twitter:  http://twitter.com/zacksresearch

Join us on Facebook:  http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

SOURCE Zacks Investment Research, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
Container technology is sending shock waves through the world of cloud computing. Heralded as the 'next big thing,' containers provide software owners a consistent way to package their software and dependencies while infrastructure operators benefit from a standard way to deploy and run them. Containers present new challenges for tracking usage due to their dynamic nature. They can also be deployed to bare metal, virtual machines and various cloud platforms. How do software owners track the usag...
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobi...
With SaaS use rampant across organizations, how can IT departments track company data and maintain security? More and more departments are commissioning their own solutions and bypassing IT. A cloud environment is amorphous and powerful, allowing you to set up solutions for all of your user needs: document sharing and collaboration, mobile access, e-mail, even industry-specific applications. In his session at 16th Cloud Expo, Shawn Mills, President and a founder of Green House Data, discussed h...
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducte...
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, analyzed a range of cloud offerings (IaaS, PaaS, SaaS) and discussed the benefits/challenges of migrating to each offe...
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
In their session at 17th Cloud Expo, Hal Schwartz, CEO of Secure Infrastructure & Services (SIAS), and Chuck Paolillo, CTO of Secure Infrastructure & Services (SIAS), provide a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. In his role as CEO of Secure Infrastructure & Services (SIAS), Hal Schwartz provides leadership and direction for the company.
In a recent research, analyst firm IDC found that the average cost of a critical application failure is $500,000 to $1 million per hour and the average total cost of unplanned application downtime is $1.25 billion to $2.5 billion per year for Fortune 1000 companies. In addition to the findings on the cost of the downtime, the research also highlighted best practices for development, testing, application support, infrastructure, and operations teams.
"We've just seen a huge influx of new partners coming into our ecosystem, and partners building unique offerings on top of our API set," explained Seth Bostock, Chief Executive Officer at IndependenceIT, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
Chuck Piluso presented a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. Prior to Secure Infrastructure and Services, Mr. Piluso founded North American Telecommunication Corporation, a facilities-based Competitive Local Exchange Carrier licensed by the Public Service Commission in 10 states, serving as the company's chairman and president from 1997 to 2000. Between 1990 and 1997, Mr. Piluso served as chairman & founder of International Te...