Mechatronics For Healthcare: 3 MedTech Stocks To Bet On

Mechatronics, a high-end technology incorporating electronics, machine learning and mechanical engineering, has been in vogue, of late. With growing prominence of Artificial Intelligence (AI) and robotic companies, organizations with significant exposure to Mechatronics have been raking in huge profits. A research by the Business Wire deciphers that the global Mechatronics and Robotics market is projected to witness a CAGR of 15.02% during the 2017-2021 period.

Considering the strong exposure of Mechatronics in almost all spheres like technology, automobile, telecom and more, the evolution of Medical Mechatronics has been the most fascinating.

The growing prevalence of minimally-invasive robot-assisted surgeries, self-automated home-based care, use of Information Technology (IT) for quick and improved patient care as well as a shift of the payment system to a value-based model indicate the predominance of Mechatronics in the MedTech space.

So, let’s delve into details on how Medical Mechatronics has been creating new opportunities in MedTech and raising investors’ confidence to put money in the healthcare space for long-term gains.

How is Mechatronics Shaping Up the Healthcare Paradigm?

Medical Mechatronics is a much-awaited digital evolution in the global healthcare industry.

Medical Mechatronics has provided innovation to the healthcare industry through reduction in the size of the age-old medical devices, development of low cost disposable devices, portability of devices and error free results.

Per Hindawi, a renowned Healthcare Engineering journal, the Medical Mechatronics revolution has been one of the most important drivers of the global knowledge-based economies like the United States.

Here we take a look at the two major aspects of Medical Mechatronics that have been doing rounds in the global headlines.

3D printing & Medical Mechatronics

The best example of Mechatronics in the healthcare industry is 3D printing, which has changed the face of the medical devices industry.

Also known as additive manufacturing, 3D printing is the process of turning a digital model into a solid three-dimensional physical object by adding material layer by layer (per an article on 3D Hubs). 3D printing has also received a warm response from the MedTech space within healthcare. Notably, research firm Future Market Insights expects the global 3D printed medical devices market to see a CAGR of 18.1% between 2017 and 2027.

Of the major companies, Stryker Corporation (NYSE:SYK) has been one of the early adopters of the 3D printing technology. The company’s FDA-approved Tritanium TL Curved Posterior Lumbar Cage is a 3D-printed interbody fusion cage intended for use as an aid in lumbar fixation.

Robotics Boosting Medical Mechatronics

The rise of Mechatronics, powerful computing, improved sensing, microfabrication and molecular imaging has enabled new robotic solutions to mitigate age-old problems for the MedTech companies. These solutions are pain less, error free and inexpensive. So MedTech companies that are using Mechatronic-based robots to cure diseases have a competitive edge with a strong customer base, solid revenues and handsome profits.

Of the major companies, MedTech giant Intuitive Surgical (NASDAQ:ISRG) is a notable mention.

Intuitive Surgical designs, manufactures and markets the da Vinci surgical system — an advanced robot-assisted surgical platform. This Mechatronic-based platform enables minimally-invasive surgery that helps avoid the trauma associated with open surgery.

The company plans to expand the usage of da Vinci in general and thoracic surgery, colorectal surgery and hernia repair in the days to come.

Let us take a look at three other MedTech stocks that have been hogging the limelight based on the growing prevalence of Mechatronics and artificial intelligence in the healthcare sector.

3 Best MedTech Stocks Riding High on Mechatronics

In this backdrop, three MedTech stocks are well positioned on strong fundamentals and solid exposure to Mechatronics.

We have used the Zacks Stock Screener to pick them. These companies have a Zacks Rank #1 (Strong Buy) or 2 (Buy) along with a Growth Score of A or B.

Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2 are better picks than most.

Abiomed Inc (NASDAQ:ABMD)

The stock sports a Zacks Rank #1 and a Growth Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here. Shares of Abiomed have surged 204.6% in a year’s time comparing favorably with the industry’s decline of 2.3%.

Impella, ABIOMED’s flagship product line has continued to be a growth driver. Impella is the world's smallest heart pump. It is a support system of percutaneous, catheter-based devices offering hemodynamic support to the heart.

To expand the flagship Impella heart pumps portfolio, Abiomed recently announced the receipt of FDA Pre-Market Approval (PMA) for its Impella CP heart pump with SmartAssist in April 2018. The technology also features an optical sensor. This development has provided the company with significant exposure to Medical Mechatronics.

The company plans a controlled roll-out of the technologically advanced heart pump at hospital sites with developed heart recovery protocols over the next fiscal year.

Varian Medical Systems Inc (NYSE:VAR)

The stock has a Zacks Rank #2 and a Growth Score of B. Shares of Varian Medical have gained 17.1% in a year’s time.

Varian Medical has received significant exposure to Medical Mechatronic trends on its Halcyon and HyperArc platforms.

The Halcyon radiotherapy treatment system has been designed to offer cost-effective cancer care worldwide. The system streamlines every aspect of image-guided volumetric intensity modulated radiotherapy (IMRT). The HyperArc platform is Varian Medical’s high definition radiotherapy technology. In Apr 2018, Varian Medical launched Halcyon 2.0 with kilovoltage imaging (Kv). The first human kV cone-beam CT images on a Halcyon were acquired at Washington University with positive feedback on image quality, speed of image acquisition, and processing.

Further, Varian Medical’s HyperArc platform is designed to treat multiple metastases brain cancer cases and continues to witness strong demand.

STERIS plc (NYSE:STE)

The stock flaunts a Zacks Rank #1 and has a Growth Score of B. Shares of STERIS have gained 31.4% in a year’s time.

The company manufactures and markets infection prevention, decontamination, microbial reduction, and surgical and gastrointestinal support products and services.

STERIS’s acquisition of U.K.-based outsourced sterilization services provider Synergy Health plc is a significant achievement. The buyout enabled the combination of STERIS' Infection Prevention and Services businesses with Synergy's Hospital Sterilization Services.

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