Stryker (SYK) is hardly striking out

In a choppy/consolidating (or perhaps worse) market, discretion dictates that one looks for companies where the demographics are running in the company's favor. Health care services in the United States is one such sector, and in this category, Stryker Corp (NYSE: SYK) is worth an evaluation.

Stryker (NYSE: SYK) is a leading provider of artificial hip, prosthetic knee and trauma products.As one might sense, orthopedic implant demand is robust and looks to remain so in the immediate years ahead, and probably beyond. Not only because the U.S.'s population is aging, but also the population in key international markets.

Analysts see sustained, double-digit earnings growth driven by the above demand and by new product launches. Further, Stryker also has modest pricing power, and analysts also see market share gains in selected business segments. The Reuters F2007/F2008 EPS consensus estimates for SYK are $2.40/$2.88.

The risks? A negative change in Medicare reimbursement rates would hurt Stryker's results. The company also remains vulnerable to the emergence of a 'game changer' -- an innovative product launch by a competitor in one of its tech-intensive business lines.

The First Call mean rating for SYK is: Buy [22 firms]. Mean 2008 target: $82.00 [high: $90, low: $74].

Stock Analysis: Stryker is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from SYK's shares. Sell / Stop Loss: $48.