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4 Top Growth Picks to Avoid Tax Tangle in MedTech


President Trump’s latest tax bill to repeal a significant part of the Affordable Care Act was again rejected by House Republicans on Nov 13. According to a Washington Post article, only modest changes were made to the legislation. While the President aims to give the bill a final attempt stressing on the importance of tax cut and reforms for economic growth (vote on the tax cut bill slated for Nov 16), let’s see how the MedTech industry is gearing up for it.

According a report by Business Insider, the Republican tax plan repeals an itemized deduction that applies to healthcare expenses. If the new bill gets implemented, families with high healthcare expenditure will be impacted as these expenses will no longer be deducted from their taxes. Hence, the masses will no longer be interested in expensive healthcare or MedTech procedures.

A report by The Hill says that the Section 4303 of the Republican tax bill plan imposes a 20% excise tax on goods manufactured overseas by subsidiaries of U.S. companies. Under the U.S. tax code, Puerto Rico is considered a foreign land which implies that U.S. parent companies will have to pay excise taxes if they purchase from their subsidiaries in the island. In this regard, the FDA recently found that around 30% of Puerto Rico’s gross domestic product was driven by pharmaceuticals and medical devices in 2016. Undoubtedly, the latest tax plan has created an uproar among MedTech players who might witness a huge reduction in their turnover with the approval of the bill.

Without a doubt, the latest political developments have resulted in widespread volatility in the MedTech space.

4 Growth Stocks in Focus

In such a tumultuous scenario, we have used the Zacks Stock Screener to pick stocks for significant gains. Let’s take a look at four MedTech stocks that are expected to gain over the long haul. Apart from flaunting a strong Zacks Rank #1 (Strong Buy) or 2 (Buy), these stocks boast a Growth Style Score of A or B.

Our Growth Style Score highlights all of the vital metrics of the company’s financials to obtain a clearer picture of the quality and sustainability of its growth. Our research shows that stocks with Style Scores of A or B, when combined with a Zacks Rank #1 or 2, offer the best investment opportunities.

IDEXX Laboratories, Inc. IDXX is a leading provider of diagnostic, detection and information products to the animal health industry as well as quality assurance products and services to the food and water industries. This Zacks Rank #2 company has a long-term expected earnings growth rate of 20.4% and a Growth Score of B.

The stock’s projected EPS growth rate for a year stands at 29.6%, compared with the broader industry’s estimate of 16%. The stock has gained 35.2% over the last year, higher than the broader industry’s 21.4%. The company has a VGM Score of B anda Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

VWR Corporation VWR is a global laboratory supply and distribution company. The company carries a Zacks Rank #2 and a VGM Score of A. The projected sales growth rate for a year stands at 3.4% compared with the broader industry’s projection of 2.7%.

The stock has gained 26.3% over the last year, better than the broader industry’s 17.1%.

SeaSpine Holdings Corporation SPNE is a medical technology company focused on the design, development and commercialization of surgical solutions for the treatment of spinal disorders.The company boasts a Zacks Rank #2.

The stock has a Growth Score of A and VGM Score of B. It has gained 37.1% over the last year, compared with the broader industry’s 21.4%. The projected EPS growth rate for a year stands at 29.2% compared with the broader industry’s 16%.

LivaNova PLC LIVN is a medical technology company which focuses on providing treatment for cardiovascular diseases and neuromodulation.This Zacks Rank #2 stock promises long-term expected earnings growth of 10%. Notably, LivaNova has a Growth Score of B and VGM Score of B. The stock has gained 96.1% over the last year, higher than the broader industry’s 21.4% gain.

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