NuVasive

2014 Change YTD: +48%

Market Cap: $2.4 billion

Major holders as of Sept. 30, 2014: Capital Research Global Investors (9.02%), Vanguard Group (6.65%), BlackRock Fund Advisors (5.24%), Champlain Investment Partners (3.86%), Federated Investors (3.66%), Smallcap World Fund (3.62%)

Why is it up? NuVasive ($NUVA) stock was basically even for most of the year and then rose 35% between October and year end. At the end of that month, the spinal device specialist announced quarterly revenue of $189.9 million, beating analyst expectations by about $10 million.

The company makes devices for spinal procedures like the less-invasive extreme lateral interbody fusion procedure, which is performed through the sides of the body. For example, the company's Decade Plate is used to stabilize and support the spine following spinal fusion surgery.

"As the spine market continues to shift toward less invasive solutions, and as better patient outcomes and clinical and economical evidence are driving surgeon adoption, we remain committed to expanding our leadership in this market. We fully believe that our procedural offerings will allow us to further penetrate what is estimated to become a $5 billion MIS [minimally invasive spinal surgery] market opportunity over the next decade," said NuVasive CEO Alexis Lukianov during the most recent Q3 2014 earnings call.

Competitors are trying to catch up to the company's high-tech offerings. "In Spine, our portfolio is more in the basic category. We need to accelerate the development of more MIS products," said Stryker ($SYK) CEO Kevin Lobo during the JP Morgan Healthcare Conference in San Francisco.

What comes next Look out for possible M&A activity in China.

"NuVasive does not have much infrastructure in the country currently, but we believe a potential Chinese M&A announcement could occur in 2015," said RBC Capital Markets analyst Glenn Novarro in a recent research note, according to Investor's Business Daily.

And at the JP Morgan conference, Lukianov said, "There's a very strong rising middle OUS [outside the U.S.] class. China, for example, growing at a very robust pace of about 25%, and we intend to have a larger stake in the Chinese market."

On the medical and product development front, Lukianov pointed out that more invasive open spinal surgery still accounts for 70% of all procedures and is a $6.5 billion market (compared to $2.5 billion for MIS). He hopes to persuade surgeons to use NuVasive devices for open procedures as well, saying at JP Morgan that the tools are designed for both surgery types and "gray the line" between minimally invasive and open procedures.

NUVA Chart

NUVA data by YCharts

For more:
NuVasive grabs spinal market share, beats Wall Street expectations and gains 10%
NuVasive ordered to pay Medtronic royalties in spinal implant suit
NuVasive hit with FDA warning letter over spine device

-- Varun Saxena (email | Twitter)

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