Tuesday, November 07, 2000

Stock Focus: Medical Supply Companies

NEW YORK - Since April, the S&P Medical Products and Supplies index is up 17% versus the Nasdaq's 19% decline. IBES International analysts project profits for this group will grow 18% this year and 25% in 2001.

Unlike manufacturers of prescription drugs and providers of health-care services--which are facing increased political pressure and government scrutiny--the medical supplies industry hasn't been subjected to the same cost-cutting demands. "There's not a lot of Medicare and other regulatory risk now," says Glenn Reicin, managing director at Morgan Stanley Dean Witter, about medical supply companies.

Haemonetics (nyse: HAE - news - people) recently had some good news from federal regulators: The company won clearance from the Federal Drug Administration to market a blood filtering system that could double the number of red blood cells harvested from a blood donor. For the quarter ending Sept. 30, Haemonetics' earnings rose 25%, to 26 cents a share, over the same period last year. (Note: Latest results are before a one-time charge attributed to the acquisition of Transfusion Technologies.) Haemonetics shares trade at just 18 times estimated 2001 earnings of $1.40 a share.

Full story at Forbes.com