Smart Buys: OSI Systems and Viasys Healthcare

In the May issue of SmartMoney, the magazine picks its top-10 stocks for the next 10 years. To make the first cut, companies had to show a “demonstrable history of sales growth.” Then, SmartMoney editors “sorted through the remaining stocks one by one, looking for common themes that were likely to play out over the next decade.” The health-themed category outperformed the three others — clean water, wireless technology and global growth — and included two medical technology firms. 

OSI Systems, of Hawthorne, CA, made the list for its powerful position as a hybrid medical/defense company. SmartMoney says revenues are basically split down the middle, with half coming from medical equipment like patient-monitoring and anesthesia systems, and the other half coming from scanning and inspection equipment for the defense and aerospace industries. According to the magazine, “Imaging is the technology that ties it all together, which means OSI should benefit from two major trends: an aging population with greater demand for medical care as well as continued defense and security spending.”

Viasys Healthcare, a Conshohocken, PA, company that sells devices in a number of markets, including respiratory care, neurology, vascular medicine, critical care, and surgery. SmartMoney is impressed by the company’s acquisition streak: it has made 11 since going public in 2001. “We expect Viasys to continue its acquisition strategy, concentrating on smaller companies that focus on respiratory care and neuro care. So far the company’s acquisitions are paying off in greater economies of scale, especially in manufacturing and distribution, which have produced higher profit margins.”    

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