Best Stocks to Buy Under Trump: Stryker (SYK)
Medical device companies are interesting because while they are often linked with Big Pharma names you’re familiar with, they operate in a very different way. In fact, I like to think of Stryker Corporation (NYSE:SYK) as more of a power tool company than a medical company. It just happens to make tools for surgeons instead of plumbers or mechanics.
Stryker tools are very sophisticated, however, and are in high demand as they make modern techniques like hip replacements much easier on both doctors and patients. In fact, thanks to its patented medical tools, Stryker is now into its 10th straight year of revenue growth. Throw in an aging population of baby boomers who want to stay active in their golden years, and the joint replacement technology of Stryker is going to be a big growth business.
The business is straightforward, then, and you don’t have to deal with the same threat of patent protection and generic competition for the same chemical formula.
However, medical device companies like Stryker took a hit in the previous administration thanks to a 2.3% additional tax on medical device maker’s profits that helped defray the costs of Obamacare. Republicans have the will and the numbers to kill that tax in a hurry this year, and lifting that would make the margins even sweeter, and the profit potential of SYK even bigger.