Stryker Corp. (SYK)

A great medical equipment company. Over time, they've consolidated and grown. Demographic trends are on his side. But he owns Abbott instead; you can't own everything. Wait for more of a pullback to buy. If the PE falls to the low-$20s, step in.

A manufacturer of medical and surgical devices. The company has had positive sales growth for over 40 years. They do a great job at identifying areas where they are weak, finding a way to fill that gap and executing the strategy quickly. There is not much exposure they hold in China -- fortuitous right now. Yield 1.03% (Analysts’ price target is $232.92)

Investing in healthcare is hard. He holds BDX which he sees it as the shopping mall of healthcare products. He used to own ZBH but they suffered from recalls. He would probably stick to one of the three since he believes they are the best run companies in healthcare.

SYK vs. Anthem He likes both. Stryker trades at 23x PE. He owns Anthem, which hit on earnings, but the market was skittish on their expense line. It's a great healthcare company

SYK vs. JNJ SYK makes medical products while JNJ also produces that plus pharma and personal care products, but are fighting talcum powder lawsuits that will persist. Despite this, he much prefers JNJ due to better diversification and valuation. But wait for a better entry point.