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Pharmaceuticals & Health Care – Medical Technologies & Services: Second

Holger Blum, Yi-Dan Wang & team
Deutsche Bank

Holding steady in second place for a third year is the Deutsche Bank trio co-directed by Holger Blum, who works out of Zurich, and London-based Yi-Dan Wang. “The team provides good analysis of a dynamic growth sector,” according to one New York–based pension fund manager. Germany’s Drägerwerk, which manufactures devices used in critical and emergency care, remains a favorite among the 16 stocks the analysts cover. With a price-earnings ratio of 10 and an enterprise value–to–earnings before interest, taxes, depreciation and amortization multiple of 5, “it is the cheapest medtech stock, despite solid and visible topline growth,” says Blum, who also co-leads (with Richard Parkes) the No. 1 team in Biotechnology and heads the team that ranks third for coverage of Switzerland. “Given substantial restructuring benefits, we are very confident predicting double-digit earnings growth for the next few years — and if Dräger can close the margin gap to its peers, the shares have the potential to double over the next two to three years.” The team predicts diverse performance among the various subsectors in 2013. “Pressures on reimbursements are resulting in lackluster growth in developed markets,” says Wang. Thus, the analysts expect companies to focus on gaining market share in established economies, increasing their presence in emerging markets, reducing their cost bases and increasing cash flows, she adds. — Leslie Kramer

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