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The medical supplies industry is expected to outperform the stock market through the summer of 2002, due to good revenue performance. Earnings growth is expected to remain steady. These stocks are timely for 2001 and 2002, but investors need to be selective.

Stocks in the medical supplies industry have continued to do well in 2001, and this is expected to remain the case in the future. Consolidation has increased in 2001 after a quiet year for acquisitions in 2000. These stocks are timely for 2001 and for the next three to five years, as well.

Technological advances, changed review procedures at the Food and Drug Administration, increased merger and acquisition activity, and other factors were some of the trends that accelerated stock prices in the medical supplies industry in the 1990s. However, market maturation, pricing pressures and economic weaknesses overseas have made the end of the decade more challenging for this sector. Most stocks in this industry will only match the market in the year 2000, but some have good price potential for the year ahead.

The companies which comprise the medical supplies industry have grown and diversified in the 1990s mainly through acquisitions and this trend to consolidation is expected to continue in 1999 and the year 2000. Stock valuations for the industry, however, have decreased in 1999 and there are concerns about the effect of rising interest rates on stock prices, as well. These stocks are expected to perform with the market in 1999 and the year 2000, and investors need to be selective in their options.

There has been a price erosion for the stocks in the medical supplies industry in early 1999 due to legislative concerns, rotation of investor sentiment in the market, and rising interest rates. However, the increased standards of living around the world, the aging population in the US and other industrialized countries, and new products are favorable for the industry for the long term. Investors will find some worthwhile stocks in this sector, but they need to seek the best prospects in terms of stock price and product diversity.

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