The best medical stock right now, according to a consensus of more than 26,000 investors participating in Motley Fool CAPS, is an Amex-listed, small-cap cancer treatment shop that hasn't earned an operating profit in 10 years. I can't believe I wrote that with a straight face.

Operationally unprofitable, BSD Medical (AMEX:BSM) sports a trailing P/E of 34 almost entirely by virtue of "other income" derived "primarily from payments received for the sale of the company's holdings in TherMatrx, Inc." (According to the firm's own earnings release from November.) Yet believe it or not, BSD currently has more investor support than biotech superstars Amgen (NASDAQ:AMGN) or Genentech (NYSE:DNA). More than medical maestro Johnson & Johnson (NYSE:JNJ). In fact, none of these giants of the medical world so much as make CAPS investors' top 10.

Aside from BSD Medical, in this first monthly look at the sector, what other companies do make the top 10, you ask?


Claim to fame


BSD Medical

Cancer treatment

In a manner of speaking


Food testing


Varian Medical

Oncology and X-rays


Zimmer Holdings (NYSE:ZMH)

Bone implants


Alcon (NYSE:ACL)

Eye-care products


Draxis Health

Manufacturing medicines





Kendle International

Facilitating drug trials



Drug delivery tech



Orthopedics products


Dollar figures in millions. Data provided by Capital IQ, a division of Standard & Poor's.

Needless to say, none of the companies on this list should be considered formal recommendations. The fact that BSD Medical occupies the top slot should give you fair warning that, before buying even a top-rated stock, due diligence is a must. And yet, if so  many investors feel strongly about these companies,  there's just got to be something about them worth looking into, right?

Common ground
Two things jump out at me from today's list. The first is that each company listed at least appears to be profitable from a surface-level, stock-screening perspective. Which suggests to me that after the Bubble burst, investors decided that profits were a good thing.

What else intrigues? The fact that two of the top three companies in CAPS investors' minds are involved in cancer treatment. Clearly, that's something that patients want cured. Apparently, investors agree with the sentiment.

Foolish final word
For my money, BSD Medical looks too speculative to qualify as a worthy investment -- but I'm in the minority on this one. Fully 115 investors out of 116 polled on CAPS say BSD Medical has a future. More than that, they seem convinced this company will find profits and go on to beat the S&P 500.

Are you one of these foresighted Fools? Or do you veer away from the crowd, and believe BSD Medical is a flash in the pan? Whatever your views, we'd love to hear them. Come on over to Motley Fool CAPS and give us an earful.

Make seven picks on CAPS by April 24 and we'll send you a free copy of The Motley Fool Five Star report. Inside, you'll discover how to use CAPS as a research tool and receive a recommended five-star CAPS pick poised to beat the market for the next decade or more -- one that can easily translate into profits for your real-world portfolio. But please hurry -- this special report will be emailed on Tuesday, April 24. And it's only being sent to CAPS members who have their seven picks in. Get started now!

Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's ranked 340th out of more than 25,000 raters. Johnson & Johnson is a Motley Fool Income Investor choice. The Fool has a disclosure policy.