The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market

by Pat Dorsey

The orthopedic device industry is pretty attractive. Developed-country populations are aging, and better health care means that people are staying active longer—which increases the demand for artificial joints. Moreover, artificial joints became a mass-market product only during the 1980s and 1990s. Because joints typically have a 10- to 12-year life span, the number of revision procedures, which replace or repair a worn-out artificial joint, is just now starting to climb. Add these revisions to the demand for first-time procedures, and the market is growing at 7 percent to 10 percent. And because annual price hikes of 3 percent to 4 percent are pretty usual in the orthopedic industry, sales growth of 10 percent to 14 percent looks pretty doable for the average orthopedic device company.