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:
- Integra LifeSciences (NASDAQ: IART) fell 5.6%. Is now the time to buy Integra LifeSciences? Access our full analysis report here, it’s free.
- LeMaitre (NASDAQ: LMAT) fell 3.4%. Is now the time to buy LeMaitre? Access our full analysis report here, it’s free.
Zooming In On Integra LifeSciences (IART)
Integra LifeSciences’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 17 days ago when the stock dropped 3.6% on the news that the U.S. Food and Drug Administration (FDA) issued a warning letter regarding violations at its Boston, MA facility. The regulatory action follows a global recall and production hold initiated by the company last month for all products manufactured at that plant. The FDA's letter highlighted several issues, including the company's failure to establish and maintain procedures to control products that did not conform to specified requirements. This warning raises questions about Integra's projected timeline for resuming sales of its tissue products, creating uncertainty for investors.
Integra LifeSciences is down 42.7% since the beginning of the year, and at $13.18 per share, it is trading 50.6% below its 52-week high of $26.70 from November 2024. Investors who bought $1,000 worth of Integra LifeSciences’s shares 5 years ago would now be looking at an investment worth $280.72.
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