Zimmer Biomet Holdings Inc. (ZBH)

Hips, knees and extremities. Demand will grow 4-6% over the long term. They have not yet expanded outside of North America. People are getting older and the number of 60 year olds is getting wider and they wear out their hips and knees. They don’t have a lot of pricing power, but have certainty in the need for the products. It sold off recently from currency exposure. The value is quite reasonable here. They have a great track record of increasing dividends and buying back stock.

(A Top Pick Nov 20/13. Up 29.78%.) Announced an acquisition, so had a good pop to it, so she sold her stake into that.

She held it in her portfolios because of the valuation and demographics. She sold into that big spike on the announcement when they made an acquisition. It has drifted down and now has come back up. There seem to be a lot of synergies. They are in the same town. There is compelling value there now. If you have a longer time horizon it will probably do well for you. She owns another medical stock.

A top pick tonight is a competitor. Healthcare is economically sensitive and the body parts business is extremely economically sensitive. If you don’t have insurance, it costs a lot to fix them and a lot of this is elective. They are making an acquisition.

Stocks go up and stocks go down, but value does not disappear. This company manufactures hips, knees, joints, etc. Demographics are going to work in their favour. Valuation is attractive. Spending money on technology and management is doing all the right things. In the next 5 years, earnings are going to grow at double-digit rates.

Market leader in knees, hips, joints, dental replacements, etc. Trading at a reasonable valuation. Long-term growth, which is not going away any time soon. He can see demand growing 5%-6% a year in North America.

Cheapest name in the space. Compelling valuation, revenue growth above industry average. She can’t find a reason that it should be trading at a discount to the group. A new knee is out and it takes a while for doctors to start using it. It can start benefiting from the demographics.