David Baskin Zimmer Biomet Holdings Inc. ZBH-N TOP PICK Aug 06, 2015

Thinks it is time to look at certain parts of healthcare. The situation is a little muddied, because we are faced with changes to the Affordable Care Act, and are not sure what form they are going to take and who it is going to affect. This company is a maker of joints, artificial hips, etc. There is some risk of competition and commoditization of these devices. He would probably look for another area in the healthcare arena. Some of the larger insurers are very interesting.

We need hips and knees and are looking to the US for them. PE is 14-15 times earnings, to shield your capital from a slow decline in the Canadian dollar. The US dollar has been a one way trade. (Analysts’ target: $134.00).

(A Top Pick Oct 13/16. Down 11%.) This is medical parts, knees, hips, spinal fusion products, etc. Had felt the stock would benefit from aging baby boomers. However, they had some inventory problems, and didn’t experience the kind of growth he expected. It’s still a great place to be.p

(A Top Pick Feb 2/17, Up 8.90%) A great US company. He likes the medical device companies. These devices are going to be demanded more and more as we all get older.

Their business is orthopedics (hips and knees). Have had shipping problems to customers and a received an FDA 483 notice (inspection) to one of their facilities. This will take a while to turn around. Better to buy Stryker.

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.

Higher utilization rates are good for the device industry. The recon market is going 14%. Are gaining market share with operating and gross margins expanding. Good 18x PE.

Prefers SYK.

They reported a great quarter this week, but share still fell over 3% because they merely reiterated their outlook and lowered sales guidance due to currency. Is down 11% this year.

ZBH will buy Orthopedic Robots, a deal he likes because the robotic surgery business is one of the most interesting corners of healthcare.