NEW YORK ( TheStreet) -- The following 10 global health care equipment and services stocks will likely benefit from the growing global demand for medical devices and services. Other driving factors include increasing medical expenditure on an aging population in developed countries and rising income levels in developing economies. Emerging nations will likely play a key role, given the scenario of greater attention to health care, construction of hospitals and clinics and rapidly progressing public health insurance.

The health care equipment and supplies market reached $297 billion by the end of 2009, according to a Deloitte report, with the U.S. leading the world in the production of medical devices and accounting for more than 40% of the global total. Going forward, reimbursement procedures, health care reforms, information technology, and demographics will impact the industry's overall growth in the U.S.

While exports of high-technology medical devices from U.S. companies will likely expand going forward, benefiting the relevant stocks, some Chinese companies are catching up on the technology front with the government focusing on developing the domestic sector.

Analysts favor these 10 stocks, as indicated by the 100% buy ratings. In addition, most of these stocks will likely outperform their peers and broader markets, based on the upside implied from their respective 12-month price targets.

10. Transcend Services ( TRCR) is a medical transcription company providing patient information management solutions to hospitals and other associated health care providers.

For 2010 fourth quarter, analysts polled by Bloomberg expect the company to report earnings of 25 cents per share, in comparison to earnings of 17 cents per share and 24 cents per share in the year-ago and quarter-ago periods. Analysts estimate the company to report earnings per share of 79 cents for 2010, $1.16 for 2011, and $1.35 for 2012, compared to earnings of 75 cents per share reported for 2009.

The return-on-equity during the past 12 months has been 16.6%. In comparison Gentiva Health Services ( GTIV), America Service Group ( ASGR), Hooper Holmes ( HH), and Conmed Healthcare Management ( CONM) have ROEs of 11.1%, 7.6%, -0.1%, and -0.2%, respectively.

All the four analysts covering the stock recommend buying. Analysts expect the stock to gain around 18% over the next 12 months with a consensus target price of $22.5.

9. China Cord Blood ( CO) collects umbilical cord blood stem cells from neonates, and provides laboratory testing, hematopoietic stem cell processing and storage devices.

Analysts polled by Bloomberg expect the company to report earnings of 4 cents per share for the third quarter of fiscal 2011 ended Dec. 31, 2010, in comparison to earnings of 4 cents per share in the year-ago period. Analysts estimate the company to report earnings per share of 18 cents for fiscal 2011 and 23 cents for fiscal 2012, compared to earnings of 10 cents per share reported for fiscal 2009.

Of the four analysts covering the stock, 100% recommend buying, in comparison to Examworks Group's ( EXAM) 50% and Healthways' ( HWAY) 23% buy ratings.

Analysts expect the stock to gain around 100% over the next 12 months with a consensus target price of $6.8.

8. HealthStream ( HSTM) provides web-based learning and solutions for the training needs of the health care sector.

For 2010 third quarter, revenues grew 16% to $16.6 million, while operating income increased 57% to $1.7 million. Commenting on the results, Robert A. Frist, Jr., CEO of HealthStream said in a press release "We were excited to see the addition of 99,000 newly contracted subscribers to our learning platform in the 92 days of the third quarter. As the Company continues to execute its strategy, it is gratifying to attract increased visibility in the financial community, as evidenced by the decision of three research investment firms to initiate independent research coverage of HealthStream in the third quarter. I believe we are well positioned to finish the year with a strong performance, as we further innovate for our customers."

The stock surged around 90% during the past one year, while Cemer ( CERN), Community Health Systems ( CYH), Tenet Healthcare ( THC) and Omnicare ( OCR) posted returns of around 17%, 7%, 25% and 5%, respectively.

All the five analysts covering the stock recommend buying. Analysts expect the stock to gain around 4% over the next 12 months with a consensus target price of $7.6.

7. Stereotaxis ( STXS) designs, manufactures and markets cardiology instrument control systems for use in an interventional medical suite for the treatment of arrhythmias and coronary artery disease.

For the 2010 fourth quarter, analysts polled by Bloomberg expect the company to report a loss of 11 cents per share, compared to a loss of 14 cents reported during the year-ago period.

Of the five analysts covering the stock, 100% recommend buying. In comparison, Johnson & Johnson ( JNJ), Edwards Lifesciences ( EW), Thoratec ( THOR) and Greatbatch's ( GB) have buy ratings of 44%, 48%, 70% and 57%, respectively..

Analysts expect the stock to gain around 35% over the next 12 months with a consensus target price of $4.8.

6. China's Winner Medical Group ( WWIN) researches, develops and markets medical dressings and disposables.

Analysts polled by Bloomberg expect the company to report earnings of 14 cents per share for the first quarter of fiscal year 2011 ended Dec. 31, 2010, in comparison to earnings of 13 cents per share in the quarter-ago period. Analysts estimate the company to report earnings per share of 59 cents for fiscal 2011 and 72 cents for fiscal 2012, compared to earnings of 56 cents per share reported for fiscal 2009.

At $5.79, the stock is trading at an attractive price-to-earnings multiple of 9.4. In comparison Stryker ( SYK), Smith & Nephew ( SNN), Kinetic Concepts ( KCI) and China Kanghui Holdings ( KH) are trading at PE multiples of 15.4, 16.8, 10.9, and 35.9, respectively. In addition, Winner Medical''s EV-to-EBITDA ratio of 4.3 is much below that of its competitors.

All the five analysts covering the stock recommend buying and expect the stock to gain around 52% over the next 12 months with a consensus target price of $8.8.

5. Delcath Systems ( DCTH) is a development-stage company that has developed a system to administer chemotherapy and other therapeutic agents.

For 2010 fourth quarter, analysts polled by Bloomberg expect the company to report a loss of 17 cents per share, compared to a loss of 18 cents per share and a loss of 24 cents per share in the year-ago and quarter-ago periods, respectively. Delcath is anticipated to turn profitable during the September quarter of 2012.

The stock surged around 104% during the past one year, while CareFusion ( CFN), Insulet ( PODD), ICU Medical ( ICUI) and AngioDynamics ( ANGO) posted returns of around -3%, 20%, 11% and -0.2%, respectively.

All the five analysts covering the stock recommend buying and expect the stock to gain around 92% over the next 12 months with a consensus target price of $18.0.

4. U.S. Physical Therapy ( USPH) develops, owns and operates outpatient physical therapy clinics.

For 2010 fourth quarter, analysts polled by Bloomberg expect the company to report earnings of 25 cents per share, in comparison to earnings of 19 cents reported for the year-ago period. For the full-year, analysts estimate the company to report earnings per share of $1.21 for 2010, $1.38 for 2011, and $1.49 for 2012, a substantial improvement from earnings of $1.00 per share reported for 2009.

The stock will likely provide an upside of 22% over the next 12 months with a consensus target price of $24.3, according to analysts polled by Bloomberg. In comparison, Hanger Orthopedic Group ( HGR) and RehabCare Group ( RHB) are expected to return around 20% and 17%, respectively.

All the six analysts covering the stock recommend buying.

3. Vascular Solutions ( VASC) is a medical device company that focuses on providing clinically advanced solutions for interventional cardiologists and radiologists, worldwide.

For 2010 fourth quarter, analysts polled by Bloomberg expect the company to report earnings of 96 cents per share, compared to earnings of 10 cents per share and 9 cents per share during the year-ago and quarter-ago periods, respectively. Analysts estimate the company to report earnings per share of $1.35 cents for 2010, a significant improvement from earnings of 33 cents per share reported for 2009.

Over the past one year, the stock surged around 38%. In comparison Baxter International ( BAX), Covidien ( COV), C.R. Bard ( BCR), and Teleflex ( TFX) returned around -14%, -6%, 16%, and -2%, respectively.

All the seven analysts covering the stock recommend buying. Analysts expect the stock to gain around 34% over the next 12 months with a consensus target price of $14.9.

2. Clinical Data ( CLDA) develops therapeutics as well as genetic and pharmacogenomic investigation techniques for diagnosing serious diseases, and for predicting drug safety, tolerability and efficacy.

Analysts polled by Bloomberg expect the company to report a loss of 47 cents per share for the third quarter of fiscal year 2011 ended Dec. 31, 2010, in comparison to a loss of 63 cents per share and a loss of 56 cents per share in the year-ago and quarter-ago periods, respectively. Clinical Data is anticipated to turn profitable in the September quarter of 2012.

The stock surged around 58% during the past one year, while Life Technologies ( LIFE), Covance ( CVD), Pharmaceutical Product Development ( PPDI), Charles River Laboratories ( CRL) and SeaCare Life Sciences ( SRLS) posted returns of around 11%, -4%, 34%, 0.5%, and 33%, respectively.

All the seven analysts covering the stock recommend buying. Analysts expect the stock to gain around 36% over the next 12 months with a consensus target price of $34.4.

1. ZOLL Medical ( ZOLL) designs and markets medical devices and software solutions for emergency medical service providers.

Analysts polled by Bloomberg expect the company to report earnings of 16 cents per share for the first quarter of fiscal year 2011 ended Dec. 31, 2010, in comparison to earnings of 11 cents per share in the year-ago period. Analysts estimate the company to report earnings of $1.16 per share for fiscal 2011 and $1.76 per share for fiscal 2012, a significant improvement from earnings of 87 cents per share reported for fiscal 2010.

Over the past one year, the stock surged around 56%. In comparison Medtronic ( MDT), St. Jude Medical ( STJ), Boston Scientific ( BSX), Thoratec ( THOR), and Volcano ( VOLC) returned around -13%, 11%, -19%, -4% and 35%, respectively.

All the eight analysts covering the stock recommend buying and expect the stock to gain around 20% over the next 12 months with a consensus target price of $51.5.
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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