As seems to be the case so often with med-tech, quality doesn't come cheap. Oh, sure, you can occasionally find stocks like Kinetic Concepts (NYSE:KCI) that have been marked down because of investor fears, and sometimes the sector as a whole will seem to go to sleep for a bit (as in 2001 or 2002). So when value comes, you'd best grab it.

In the case of today's subject, leading sleep and respiratory company Respironics (NASDAQ:RESP), you have a quality company that seems to be a bit in thin air when it comes to valuation.

Now, the company's fiscal second quarter was plenty good. Sales climbed 14%, the gross margin improved a bit, and net income grew by 20%. Breaking it down a bit further, the large domestic sleep business saw sales up more than 15%, while the hospital business grew almost 13% and the international efforts added 13% growth.

And the industry itself is still in fine shape. It would seem that a large segment of the patient population is untreated -- perhaps in excess of 85% -- so there are still plenty of patients left to treat. Furthermore, the growing obesity trend plays right into Respironics' wheelhouse, because sleep apnea is often a consequence of obesity.

Though rival ResMed (NYSE:RMD) has been making inroads into Respironics' market share, the latter company will soon be rolling out a new system and two new masks, which should help sales. Furthermore, both companies are still well ahead of would-be rivals like Tyco (NYSE:TYC), Vital Signs (NASDAQ:VITL), and Invacare (NYSE:IVC). Respironics also benefits from a clean balance sheet that allows it to make deals and buy new technologies or products.

Even with all those positives in mind, though, I can't really recommend the stock. So it would appear that we have another case of great company/not-so-great stock. But that's the way it often goes in med-tech land -- you get a chance every now and then to get good stocks at good prices, but quality companies don't stay cheap for very long.

For more medical missives:

Tyco is a Motley Fool Inside Value recommendation. Try a 30-day risk-free subscription to the newsletter service that scours the sales rack and finds great stocks at bargain-basement prices.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).