A Health Stock Worth Pumping Up

09/05/2012 10:15 am EST

Focus: STOCKS

Even in this crazy market, one thing is certain: More people are graying, and that means companies that can provide relief from the buffets of aging will sail through relatively smoothly, writes Mike Cintolo of the Cabot Market Letter.

The market has been quiet, but our indicators remain in great shape. We're going to do a little more buying, including adding to our position in Edwards Lifesciences (EW).

Edwards Lifesciences is a big ($1.8 billion of revenue during the past year) maker of many heart valves, but the ruling reason to own the stock revolves around Sapien, Edwards' latest valve that can be inserted through a small incision in the thigh! Obviously, that's a huge advantage over open heart surgery.

Sapien has been selling well in Europe for a few years, but it's the US that is the huge opportunity. The valve has been selling since last November in the US, but only for patients deemed too frail for open-heart surgery.

But in June, an FDA advisory panel advised expanding Sapien's label, and the full FDA usually follows the panel's recommendation (a decision is likely within a couple of months).

And there's no real competition—Medtronic has a product, but it's unlikely to reach the market until 2014!

Edwards' earnings are beginning to ramp up, and the stock, which has been resting for a few weeks after a huge March to June up move, has tightened up and is starting to wake up. Buy EW.

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