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2 Medical Technology Stocks To Weather Market Pullback

August 25, 2015 1:49 pm
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Given the wide domestic market slack, Piper Jaffray analysts Matt O'Brien and J.P. McKim reviewed their medical technology stocks list (which includes orthopedics, dental and vision care names) to determine which companies might provide good investment opportunities to weather the storm.

The experts noted that, while “exposure to China, the main source of the sell-off, is fairly limited” on their list, investors worried about the situation should be careful with capex, deferrable procedure and cash-strapped companies in the near term.

Piper Jaffray Picks

Taking all this into account, the firm favors K2M Group Holdings Inc (NASDAQ: KTWO) and Cooper Companies Inc (NYSE: COO), as they offer products that are more resilient to macro forces than most others.

O'Brien and McKim highlighted, however, that none of these names is completely protected from macroeconomic burdens. Notwithstanding, the products they sell will probably be less impacted by the overall economic conditions, they suggested.

Related Link: A Bad Sign For Biotech Bulls

On the other hand, the analysts named two companies with considerably greater exposure to the Chinese market: Stryker Corporation (NYSE: SYK) and CONMED Corporation (NASDAQ: CNMD).

If sales continue to be under pressure in the region, these companies will be among the most affected in the next several quarters. Having said this, Piper Jaffray continues to like Stryker longer term due to its growth potential.

  • K2M is Overweight rated, with a $29.00 price target
  • Cooper Companies is Overweight rated, with a $212.50 price target
  • ConMed is Neutral rated, with a $51.00 price target
  • Stryker is Overweight rated, with a $110.00 price target

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