Successful investors typically have one or more areas of expertise -- industries that they're very familiar with, where they have a good grasp of the main players, developing trends, competitive positions, growth prospects, and so on. If medical equipment is an area that you're focusing on, or one you're interested in learning more about, you should note an important new development: Medicare is expanding its coverage for implantable cardiac defibrillators (ICDs) by a third, meaning it'll now cover some half-million people. These ICDs, which cost about $20,000 each, are used to control hearts with irregular heartbeats by periodically jolting the heart back into a normal rhythm.
The new decision by Medicare was influenced by a study that reported 23%-31% fewer sudden deaths among those with moderate heart failure who used ICDs. It also found benefits even for those with mild heart failure.
This development is significant for investors because those companies that make ICDs can expect higher demand for them, which should result in boosted sales and earnings. Some firms that make or plan to make ICDs include Guidant (NYSE:GDT), St. Jude Medical (NYSE:STJ), and Medtronic (NYSE:MDT).
This is a milestone in the growing acceptance of ICDs as a heart failure therapy. As usage becomes more widespread, partly because of the Medicare ruling, it's reasonable to expect the price to come down. And as the price comes down, usage is likely to be boosted further. These are the kinds of developments that investors should pay attention to as they evaluate the potential of a company and industry. One place to follow developments in an industry or for a stock is via research available from your brokerage. See what your brokerage offers -- and to learn about some brokerages that may suit you even better, visit our Broker Center, which also offers guidance on evaluating brokerages.
What do you think of ICDs and medical equipment makers as investments? Share your thoughts on our discussion board.
Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.
