The health care sector has seen a lot of controversy lately, from concerns about drug pricing and accounting (read Valeant Pharmaceuticals), to opposition to mergers aimed at reducing taxes (read Pfizer and Allergen).

However, pockets of the sector, such as medical devices, are quietly looking brighter and more profitable.

While the broader iShares US Medical Devices (IHI) - Get Report index has gained more than 8% in the past year, these two star performers belong to a select group of stocks that have eked out massive gains in the past 12 months, far outpacing the index, the industry and the broader markets.

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1. Abiomed  (ABMD) - Get Report

Abiomed manufactures Impella heart pumps, and these products were largely responsible for the company's ability to record record revenue of $329.5 million in fiscal 2016, up 43% from the previous fiscal year. In fact, with fiscal fourth-quarter revenue increasing 39% to $94 million, the company recorded its 26th consecutive quarter of double-digit revenue growth, Cardiovascular Businessnoted.

With its stock price up 57% over the last year, you might wonder how much higher Abiomed shares can go. But the April 7 premarket approval by the Food and Drug Administration of the Impella 2.5, Impella CP and Impella 5.0 heart pumps has opened up a huge market opportunity for the company.

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These devices are for treating patients with cardiogenic shock after a heart attack or open-heart surgery, and they're the only FDA-approved percutaneous (meaning using a needle instead of a larger incision) temporary ventricular support devices for this condition, according to the company.

In addition, the potential for increasing sales is large, as the company estimates that its Impella devices have been used for only 5% of the total high-risk patient population.

As early as 2020, Abiomed expects annual revenue to hit $1.2-1.8 billion, boosted by Impella sales.

Analysts, too, are sold on the stock. On average, they're expecting the company to report adjusted earnings per share of $1.77 for the fiscal year that ends in March 2018. That would be 57% growth from the $1.13 in adjusted EPS analysts are expecting for the current fiscal year.

This stock is poised to be a moneymaking machine for investors.

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2. Edwards Lifesciences (EW) - Get Report

California-based Edwards Lifesciences manufactures equipment for the treatment of late-stage cardiovascular disease.

Recently, the company has seen excellent results from its nonsurgical heart valves, which are used for patients who may be considered at high risk of developing complications from open-heart surgery.

Sales of these transcatheter heart valves grew 37% to $367.8 million in the most recent quarter, The Wall Street Journalsaid. This number not only beat analysts' sales expectations of $340 million, but also helped the company to raise its revenue guidance for the full year to a range of $2.7 billion to $3 billion from its previous forecast of $2.6 to $2.85 billion, the newspaper also reported. 

Apart from higher-than-expected sales in the first quarter lower currency pressure and the likelihood for an earlier-than-expected expansion for Sapien 3 brand of transcatheter aortic valve replacements in the U.S. has also helped the company arrive at the renewed guidance, Market Realist wrote.

The stock might already be up 53% over the last year, but analysts expect it to gain a lot more ground. Their average 12-month price target is $120, which is 20% higher than recent levels. The stock has recorded average annual adjusted EPS growth of 23% over the past five years.


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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.