In this article, we discuss 5 of the best medical device stocks to buy now. If you want to go through our detailed medical technology industry discussion, head directly to the 12 Best Medical Technology Stocks To Buy Now.
5. DexCom, Inc. (NASDAQ:DXCM)
Number of Hedge Fund Holders: 78
DexCom, Inc. (NASDAQ:DXCM) is a firm dedicated to the development, manufacturing, production, and distribution of continuous glucose monitoring (CGM) systems tailored for efficient diabetes management. The CGM system comprises a sensor device and a backend system, offering real-time data on glucose levels, body temperature, and contextual information in a user-friendly format. These insights are of significant value to both patients and healthcare professionals.
Following the release of its earnings report on October 27, shares of DexCom, Inc. (NASDAQ:DXCM) experienced a notable surge. The report revealed that the market for “continuous glucose monitoring devices” remains resilient despite the adoption of Ozempic, and this resilience is anticipated to continue. The company demonstrated strong sales growth, with a remarkable 26% year-over-year increase, reaching $975 million—exceeding the estimated $940 million. Moreover, profit margins expanded at a rate surpassing expectations, leading to earnings of $0.50 per share, well above the projected $0.34.
78 out of the 910 hedge funds part of Insider Monkey’s Q3 2023 database were DexCom, Inc. (NASDAQ:DXCM)’s investors. Israel Englander’s Millennium Management is the largest investor out of these, owning 2.78 million shares that are worth $259.5 million..
Baron Health Care Fund made the following comment about DexCom, Inc. (NASDAQ:DXCM) in its Q3 2023 investor letter:
“DexCom, Inc. (NASDAQ:DXCM) is a leading provider of continuous glucose monitoring technology (CGM) for people with diabetes. The stock declined after Novo Nordisk released SELECT trial results. The trial results have led to investor concerns that Wegovy and medications in the same class (Ozempic, Mounjaro, and other drugs in development) may be broadly reimbursed by payors and widely adopted. This has raised questions about the long-term impact of GLP-1 drugs on the size of DexCom’s addressable market and the terminal value of the stock as these new medications could slow the progression of diabetes for those who are pre-diabetic and reduce the need for insulin for those with Type 2 diabetes. We think GLP-1 drugs will be used in conjunction with CGM technology, which will remain a critical diabetes management tool. We continue to believe DexCom has an attractive long-term growth runway ahead.”
4. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holders: 78
Intuitive Surgical, Inc. (NASDAQ:ISRG) is a U.S.-based corporation focused on the development, manufacturing, and marketing of robotic products aimed at enhancing clinical outcomes for patients through minimally invasive surgery, with its notable contribution being the da Vinci Surgical System. The da Vinci system is made up of a surgeon’s console, a patient-side cart equipped with four robotic arms, a 3D vision system, and proprietary instruments.
In Q3 2023, Intuitive Surgical Inc (NASDAQ:ISRG) reported revenue of $1.74 billion, reflecting a 12% rise compared to $1.56 billion in the third quarter of 2022. This increase in revenue was primarily attributed to a surge in da Vinci procedure volume and an expansion of the installed base of systems. Global da Vinci procedures witnessed a growth of approximately 19% in comparison to the third quarter of 2022. The compound annual growth rate from the third quarter of 2019 to the third quarter of 2023 stood at approximately 17%. In addition, the company installed 312 da Vinci surgical systems during the quarter, up from 305 in the third quarter of 2022.
At the end of the third quarter of 2023, 78 hedge funds in the database of Insider Monkey held stakes worth $5.05 billion in Intuitive Surgical, Inc. (NASDAQ:ISRG), compared to 68 in the preceding quarter worth $3.49 billion.
Here’s what RiverPark Advisors said about Intuitive Surgical, Inc. (NASDAQ:ISRG) in its Q1 2023 investor letter:
“Intuitive Surgical, Inc. (NASDAQ:ISRG): ISRG shares were a top detractor in the quarter despite 4Q results largely in line with expectations. The company used the quarterly release to define the timeline of upcoming products including its next-gen platform, now expected next year. The market was disappointed by this timing.
Intuitive is the pioneer and clear leader in robotic surgery and remains one of our most compelling long-term growth opportunities. The company’s products address a massive market with very low current penetration, and the company has a strong moat. Its major competitors, J&J and Medtronic, are facing large delays (to at least 2024) in introducing their platforms as the FDA approval process has become more difficult. These delays give Intuitive more time to place systems, train surgeons and launch new products, extending its competitive advantage. The company’s “Extended Use Program” aims to make its tools more price-competitive to traditional non-robotic procedures, which increases the company’s moat.”
3. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 88
Johnson & Johnson (NYSE:JNJ) is a worldwide healthcare company dedicated to the research, development, manufacturing, and distribution of healthcare products globally. On November 7, Johnson & Johnson’s (NYSE:JNJ) MedTech unit announced its intention to submit an application to the U.S. Food & Drug Administration in the second half of 2024 to commence clinical trials for its robotic surgical system, Ottava. This surgical robot integrates four robotic arms into a standard-sized surgical table and possesses the capability to reposition a patient seamlessly without disrupting the ongoing surgical procedure, as stated by the company.
On October 17, Johnson & Johnson (NYSE:JNJ) unveiled adjusted earnings and revenue that surpassed expectations, prompting an upward revision of its full-year guidance. This was fueled by strong sales in both its pharmaceutical and medical devices divisions. The company also revealed a net income of $4.31 billion, translating to $1.69 per share, aligning with the net income of $4.31 billion, or $1.62 per share, reported for the same period in the preceding year.
In the third quarter of 2023, the number of hedge funds tracked by Insider Monkey with holdings in Johnson & Johnson (NYSE:JNJ) declined to 84, down from 88 in the prior quarter. The collective investments by these hedge funds surpass a total value of $4.15 billion. A leading hedge fund investor in Johnson & Johnson (NYSE:JNJ) is Bridgewater Associates, managed by Ray Dalio, with a substantial stake valued at approximately $424.3 million.
2. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 103
Founded in 1984 by brothers Steven and Mitchell Rales, Danaher Corporation (NYSE:DHR) is a diversified American conglomerate with a global presence. The company, headquartered in Washington, D.C., specializes in the design, manufacturing, and marketing of medical, industrial, and commercial products and services. Danaher Corporation (NYSE:DHR) operates through three distinct segments: Life Sciences, Diagnostics, and Environmental & Applied Solutions.
Danaher Corporation (NYSE:DHR) unveiled its Q3 2023 earnings report on October 24, 2023, disclosing a net earnings figure of $1.1 billion, equivalent to $1.51 per diluted common share. Despite facing a 10.5% year-over-year decline in revenues, amounting to $6.9 billion, the company exceeded expectations in earnings, showcasing resilience in a challenging operating environment.
As of September 2023, 103 among the 910 hedge funds surveyed by Insider Monkey had bought the firm’s shares. Danaher Corporation (NYSE:DHR)’s largest hedge fund shareholder is Andreas Haloversen’s Viking Global since it owns 4.63 million shares that are worth $1.02 billion.
1. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 109
Based in Waltham, Massachusetts, Thermo Fisher Scientific Inc. is an American provider of analytical instruments, life sciences solutions, specialty diagnostics, laboratory, pharmaceutical, and biotechnology services. The company was established in 2006 through the merger of Thermo Electron and Fisher Scientific.
Thermo Fisher Scientific Inc. (NYSE:TMO) revealed on November 21 that it had entered into a collaboration with EDX Medical Group for various initiatives, focusing on the advancement and potential commercialization of several exclusive qPCR assays. These assays serve as tools to detect the presence of mutant genes.
At the end of the third quarter of 2023, 109 hedge funds in the database of Insider Monkey held stakes worth $8.9 billion in Thermo Fisher Scientific Inc. (NYSE:TMO), up from 103 in the preceding quarter worth $7 billion.
Thermo Fisher Scientific Inc. (NYSE:TMO) was mentioned in Weitz Investment Management’s second-quarter 2023 investor letter. Here is what it said:
“Portfolio activity this quarter included opportunistically initiating a position in life sciences tool and equipment maker Thermo Fisher Scientific Inc. (NYSE:TMO), a long-time holding of other Weitz portfolios, at an attractive valuation.”
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