At last, we’ve made it! This is the final article in the great industries for investment series. If you haven’t seen the other articles up to now, you can find them linked below:
“Red Dot” Industries
“Green Dot” Industries
Our final entry will wrap up the “green dot” list – places to find attractive companies for investment.
To tell you the truth, this article was the longest one to put together in the series. The other four “green dot” industries we investigated are clearly outstanding business models in today’s day and age. All of them play into worldwide mega-trends, have outstanding financial characteristics, and have solid, durable competitive advantages.
But these are not easy to find, wholesale. In fact, I had a lot of trouble finding a fifth industry that was as attractive top-to-bottom as those four. They still represent our “best ideas” for places to go fishing for great companies.
However, every now and then you can catch a big fish in a small pond. For this final article, let’s take a look at a few industries that – while every participant in them certainly isn’t of “green dot” caliber – they still provide attractive characteristics that could produce a few select companies definitely worth a look.
What are they? Here we go…
Medical Devices
Medical devices, by and large, is an interesting space for investment.
There are certainly durable competitive advantages in the form of regulatory barriers and switching costs. Of course, there is the hurdle of getting a device approved by the FDA – no small feat. But then, you must convince doctors and surgeons that your device is better than alternative methods of treatment – also not a small feat, given the (understandably) conservative, risk-averse nature of the field. The upside is that, once your device has found its way into the standard-of-care, it is much more difficult for a competitor to displace it.
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