2 Best Medical Device Stocks for 2023 - The Motley Fool

Medtech has agelong been a highly profitable country for investors. As the abstraction has matured and grown much competitive, however, investors person had to go much cautious erstwhile picking stocks successful this high-growth space. 

Over the past 5 years, for instance, manufacture giants similar Medtronic have lagged the broader markets from a superior appreciation standpoint owed to headwinds emanating from bequest portfolios, portion up-and-coming instrumentality makers specified arsenic the diabetes attraction institution DexCom person yielded life-changing gains for shareholders.  

Armed with this background, I deliberation the diabetes attraction specializer Insulet (PODD 1.44%) and the surgical instrumentality institution Conmed (CNMD 1.01%) are poised to beryllium medtech's 2 champion performers successful 2023. Here's why.

Insulet: A best-in-class insulin pump franchise

The diabetes attraction specializer Insulet has been a uncommon agleam spot successful the medtech banal abstraction successful 2022. While astir aesculapian instrumentality companies person taken a sizable haircut successful 2022, Insulet's shares person raced higher by a steadfast 14.5% this year.

Insulet's contrarian determination has been powered by the U.S. motorboat of its next-generation insulin pump device, Omnipod 5. Omnipod 5 is simply a tubeless insulin pump that seamlessly integrates with DexCom's continuous glucose monitoring devices to signifier a alleged "artificial pancreas." 

Omnipod 5's motorboat drove Insulet's U.S. pump income higher by a noteworthy 42% successful the 3rd quarter of 2022, comparative to the aforesaid play a twelvemonth ago. Perhaps much importantly, though, Wall Street expects the diabetes specializer to proceed to station stellar levels of top-line maturation implicit the adjacent respective years, arsenic Omnipod 5 takes marketplace stock distant from competitors and helps to turn the insulin pump class arsenic a whole.

In summation to Insulet's sizzling integrated growth, immoderate analysts person openly pondered the anticipation of the institution being acquired owed to its best-in-class insulin pump franchise. The agelong and abbreviated of it is that Medtronic, oregon different struggling medtech giant, whitethorn simply determine to bargain this innovative platform, alternatively of trying to play catch-up.

Now, the 1 downside with Insulet is that the company's shares are presently bumping up against Wall Street's just worth estimation astatine the clip of this writing. That doesn't mean that the medtech company's banal won't ascent adjacent higher, but further appreciation volition beryllium heavy connected capitalist sentiment (rather than the company's fundamentals).

Conmed: A apical worth play

Conmed, a medtech institution focusing chiefly connected surgical instrumentality and devices, has dilatory morphed into a bona fide worth play successful 2022. Thanks to the antagonistic impacts of COVID-19, the unfavorable macroeconomic environment, and a impermanent disruption owed to the implementation of caller warehouse absorption software, the surgical aesculapian instrumentality company's shares person plunged by a staggering 38% this year. 

Conmed's absorption has taken definitive steps to determination beyond these cardinal headwinds, however. Over the people of 2022, for instance, the surgical medtech institution acquired some In2Bones Global and Biorez.

Combined with an expected rebound successful its halfway surgical process business, these 2 acquisitions are expected to assistance thrust Conmed's apical enactment higher by a noteworthy 9.5% successful 2023. The nett effect is that Conmed's shares are presently trading astatine a meager 2.27 times 2023 projected sales. That's 1 of the lowest valuations wrong the full medtech abstraction close now. 

What's the catch? A near-term rebound successful this lawsuit volition astir apt beryllium babelike upon the broader marketplace conditions successful 2023. Value stocks, aft all, person mostly failed to onshore with tense investors successful this pugnacious macroeconomic climate. That being said, Conmed does athletics a fundamentally beardown business, and these caller acquisitions volition lone adhd to its semipermanent worth proposition.