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3 Red-Hot Medical Tech Stocks That Could Beat Earnings Estimates

Despite the concerns over the struggles of politicians to craft a new health care plan for the United States, the health care sector, and many of its subsectors, have had an outstanding first half to 2017. That comes as no surprise to some on Wall Street as the sector faced some bitter political rhetoric during the campaign season last year and was clearly out of favor. Medical technology had a second strong quarter in a row, up a stunning 13.2%, versus 5.5% for the S&P 500.

A new report from the medical technology team at RBC warns that the premium in the group has jumped considerably due to the strong performance, and the top companies need to beat guidance and consensus to continue their solid runs. The analysts noted this in their recent report:

While the MedTech index was trading at a 5% discount to S&P 500 at the start of the year, it now trades at a 5% premium, a 10-percentage point swing in the space of six months. The premium peaked in early July 2016, before the second quarter 2016 reporting season started, and then nose-dived in the next six months. MedTech needs support from a strong earnings season to avoid a similar outcome this year.

The RBC analysts do remain very positive on three top companies that they feel have the ability to beat earnings estimates and raise guidance going forward. All three are rated Outperform.

Boston Scientific

This top medtech company has remained on a slow and steady grind higher over the past five years. Boston Scientific Corp. (NYSE: BSX) develops, manufactures and markets medical devices that are used in interventional cardiology, peripheral interventions, vascular surgery, electrophysiology, neurovascular interventional, oncology, endoscopy, urology, gynecology and neuromodulation.

The analysts noted in their report that the company is a benefactor of the weakening U.S. dollar, and despite the company...