Medical Device Companies: Look At Services

A recent report by Deloitte argues strongly for the importance of service excellence in medical device companies. Of the medical device companies benchmarked by Deloitte, 21% was the average portion of revenue attributed toward services -- but can go as high as 50%. "Even those impressive numbers understate the importance of services in the industry. In many cases, companies compete on services—their overall sales are driven by service excellence," the study reads. The successful medical device companies of the future are those that are forward-thinking and focusing on service excellence. Begin paying careful attention to this line of your balance sheets and be aware of companies making acquisitions in this field. Strong growth here may be a good sign for the company.

Some analyst favorites that you may want to begin looking at for these trends: Immunicom Corp (NASDAQ: IMMC), Mindray Medical (NYSE: MR), Hologic (NASDAQ: HOLX), Thermage (NASDAQ: THRM), Medtronic (NYSE: MDT), Stryker Corporation (NYSE: SYK), Zimmer Holdings (NYSE: ZMH), Covidien (NYSE: COV), China Medical Technologies (NASDAW: CMED)