CNBC’s Jim Cramer on Monday touted the booming medical device bull market, pointing to strong earnings reports from related companies across the board.
“There is no denying that the medical device bull market is on the rise, and we hear the same incredibly positive story after story,” Kramer said. “We can only hope that the debt ceiling-related sell-off will drag down the overall market and give us the opportunity to buy medical equipment at unfair discounts.”
The pandemic’s turmoil over the past few years has seen hospitals overwhelmed with COVID-19 patients, struggling to provide life-saving care, and mass non-emergency surgeries postponed. But as the crisis subsided, non-essential procedures resumed, and sales of medical equipment increased.
Kramer points to companies like InMode, known for developing minimally invasive radiofrequency devices used primarily for cosmetic surgery, whose earnings report earlier this month saw a 43% increase in consumables and services revenue. was shown. But Inmod’s shares plunged on the news, which is likely because the company didn’t update its full-year forecasts, Kramer said. But Mr. Kramer blamed overly cautious management for the results, arguing that Inmod shares are undervalued.
Another potential beneficiary is Johnson & Johnson, which reported better-than-expected quarterly results in April, thanks in part to a successful medical-device unit, Cramer said.
“When it comes to J&J, it’s all about talc right now, like the lawsuit about talc being linked to ovarian cancer,” Kramer said. “The real issue here is not revenue, but litigation risk.”
Cramer also highlighted Intuitive Surgical, which manufactures the robotic Da Vinci Surgical System, reporting a “true beat and raise quarter.” Intuitive sold the same number of robotic surgical systems as in the previous year, but the number of such procedures worldwide increased 26% year-over-year, Kramer said. Since Cramer spoke with Intuitive CEO Gary Guthart in March, the company’s stock has risen 38%.
Kramer also has an interest in GE Healthcare, which he said he bought last week for Investing Club’s portfolio.
“The company has a great diagnostic equipment division, including a large number of scanners that are essential in detecting and monitoring Alzheimer’s disease,” Kramer said. “As the FDA approves more drugs for Alzheimer’s disease, we will need more machines to know if new treatments work.”