What Happened?

A number of stocks fell in the afternoon session after the U.S. Commerce Department initiated a national security investigation into medical equipment and devices, raising concerns about potential tariffs. 

The probe, conducted under Section 232 of the Trade Expansion Act, examines whether imports of items like syringes, infusion pumps, and surgical instruments pose a national security risk. Such investigations can pave the way for new import duties, creating a significant overhang for the sector. The goal of potential tariffs would be to boost domestic manufacturing by increasing the cost of foreign goods. This development has introduced new uncertainty for the industry, leading to broad-based declines in the stocks of major manufacturers, including Baxter International and GE HealthCare, as investors weigh the potential impact on supply chains and costs.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Medical Devices & Supplies - Specialty company Bausch + Lomb (NYSE: BLCO) fell 3.4%. Is now the time to buy Bausch + Lomb? Access our full analysis report here, it’s free.
• Medical Devices & Supplies - Specialty company Enovis (NYSE: ENOV) fell 3.8%. Is now the time to buy Enovis? Access our full analysis report here, it’s free.
• Medical Devices & Supplies - Specialty company Haemonetics (NYSE: HAE) fell 4.1%. Is now the time to buy Haemonetics? Access our full analysis report here, it’s free.

Zooming In On Haemonetics (HAE)

Haemonetics’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 6 months ago when the stock dropped 7.3% on the news that stocks gave back some of the gains from the previous day as the White House clarified the tariffs on imports from China would add up to 145%, while the baseline 10% tariffs remained in place for most countries. 

This added layer of uncertainty reminded investors that the global trade environment remained volatile, limiting the potential for sustained market gains. Also President Trump said he was willing to accept pain in the short term, and was aware his policies could cause a recession, but he remained more mindful of a more severe case of economic depression (higher unemployment and prolonged downturn). For investors, this suggested that the administration could prioritize long-term structural shifts over near-term economic stability, further increasing policy-driven risk in the markets.

Haemonetics is down 37.8% since the beginning of the year, and at $48.76 per share, it is trading 47.8% below its 52-week high of $93.38 from November 2024. Investors who bought $1,000 worth of Haemonetics’s shares 5 years ago would now be looking at an investment worth $559.65.

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