Stryker Corp. (SYK)

Seasonal strength is from the beginning of June until the middle of July and then goes sideways after that. We reached the end of the seasonal strength in the sector. You could hold until the next period of seasonal strength or sell it.

Comparing them to JNJ-N, SYK-N is blowing them out of the water. They are doing 3D printers to create products where bone can grow back. Dividend growth is in the 20% range. (Analysts’ target: US$156.00).

The medical device space has done well in healthcare. This goes back to so much money having left biotech. Part of what drives this one is surgical procedure growth. As the population ages, you need to get more surgical procedures. There are some good trends behind this company and it has been executing well. (See Top Picks.)

This is known for knees and hips, and they have sold millions of knee replacement implants. They’ve recently started using a robot to replace the body parts, giving greater accuracy and lower costs. With the robot, you can only use their parts, making it a closed system. He doesn’t foresee any changes in the US health care act having an effect on this company and their equipment. Dividend yield of 1.3%. (Analysts’ price target is $132.)

This is a business that people need to have exposure to. His clients own a similar company, Zimmer Biomet (ZBH-N) which manufactures replacements for hips, knees, and they do stuff for your back, dental. This is a business that unfortunately is going to do well as people age and live longer and wear out their useful parts. Hips and knee replacements is going to grow at a significant rate, and there are only a few companies that manufacture these things.

It is an interesting space, but expensive. Wait until we get clarity on what is happening with Obamacare. Investors may migrate out of the devices group.

This is a long-term Hold. He recently added to his holdings. This is your hip, knees, ankles, feet, prosthetics. You are paying a little bit more for their growth. This is going to be the wave of the future. Feels they are capturing market share.

(Top Pick Feb 25/16, Up 21.75%) He is not chasing high flying pharma, but the more steady, boring ones that people use more and more as they age. They grow by acquisition.

When it comes to healthcare stocks, you have to differentiate between those pharmaceuticals that have very good margins without any threat to their profit margins, and a stock like this that makes implants. In the field of implants, there has been very little innovation in the last 10 years, and he thinks problems are going to come from both Medicare and Medicaid. Thinks they are going to be pushing prices down, not up, which is a threat to the implant manufacturers.

(A Top Pick Feb 25/16. Up 14.39%.) Hospital equipment. The growth drivers are charged by the demographics, but also having really high quality equipment, and making strategic acquisitions to integrate itself into the hospital industry structure in a better way. (Wouldn’t buy at current prices, but wait for a 10% pullback at least.)

Demographically this is really positive. Mr. Trump and Mrs. Clinton debate doesn’t factor into a company like this. They make knees and hips, and are into shoulders a bit now. They now include technology so that if a hip has problems, it can send a message. A little expensive, but a good grower and there is room for acquisitions.

Thinks this is a probably going to be a good time to be investing in manufacturers of medical devices. There is a whole seasonality that starts in January with a little bit of a pickup in February. They tend to peak every year right around August/September, so there is a bit of time to ride this out.

Healthcare is the only sector that has both top line and earnings growth. Hospital beds, hip and knee replacements. They are geared to the aging demographic.

This is down from its highs and is a good story.

(A Top Pick Jan 28/14. Up 5.15%.) Loves the company. Very innovative. They are introducing more technology in the operating room. Not only providing the product that goes into your body, but also building the robot that assists the doctor that performed the surgery. Has a great 5 year track record of increasing its dividend. Good strong balance sheet. Strong international sales. Still a Buy.