The Rising Influence of Rising Affluence

[DewDiligence]

Big-ticket medical devices are a challenging test for multinational companies who sell in emerging markets. Trusted brand names do matter, but not as much as they do with drugs, food, and consumer products. The reason is that big-ticket medical devices are bought only once and the decision on which device to buy is generally made by the doctor, not the patient.

I don’t own any of the “pure-play” multinational device companies such as MDT, SYK, and ZMH; however, I do have a large position in the new ABT, which derives about 25% of sales from medical devices.