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Since August, Boston Scientific Corp. (NYSE:BSX) shares have been in a trading range of around $5 to $5.80 per share, however, the stock recently broke through those levels and it now trades just over $6 per share. That could be a sign that more gains are possible, especially since end-of-the-year tax loss selling is over. Boston Scientific is a well-diversified company that is focused on developing, manufacturing and marketing a wide range of medical devices. It has a number of business divisions in areas like electrophysiology, endoscopy, urology, women's health, interventional cardiology, cardiac rhythm management, and neuromodulation.

Boston Scientific is led by CEO, Michael Mahoney and it has a major global sales force that operates in about 40 countries. It also has around 24,000 employees worldwide and 15 manufacturing facilities. Because it manufactures and markets devices, it is well-positioned to focus on quality and expense controls. This company has been known to develop and design new products but it has also frequently acquired other companies with promising technologies and product lines. It beat Johnson & Johnson (NYSE:JNJ) out when it bought stent manufacturer, Guidant. In November 2012, it announced yet another acquisition when it offered to acquire Vessix Vascular, Inc., which has created a device that treats high blood pressure. It makes sense for Boston Scientific to continue making acquisitions in order to fuel growth, especially since it has a solid balance sheet and can borrow money at record low interest rates, if needed. Because of that, this company is likely to continue pursuing more buyout deals in the future.

Analysts expect this company to earn about 43 cents per share in 2013. That puts the price-to-earnings ratio at just around 14 times earnings. That is very cheap when you consider that the average stock in the medical devices sector trades for about 27 times earnings. If Boston Scientific were to reach that level of valuation, the stock could nearly double in value to about $12 per share. This company has a solid balance sheet with about $352 million in cash and around $4.26 billion in debt. It also trades for just a small premium to book value, which is $4.97 per share. While this company has some potential product liability and competitive risks, this comes with the territory and it has successfully managed these risks and litigation expenses for many years.

Boston Scientific shares now trade at $6.28, and the stock now appears likely to hit a new highs since the 52-week high is currently just 13 cents away at $6.41 per share. With upside momentum simmering and a still-cheap valuation, it makes sense to consider buying the shares.

Key Data Points For Boston Scientific From Yahoo Finance:
Current Share Price: $6.28
52-Week Range: $4.79 to $6.41
Dividend: none

Mela Sciences, Inc. (NASDAQ:MELA) is another medical device company that has developed a product called MelaFind, which helps dermatologists to detect melanoma (skin cancers). It took many years and millions of dollars to develop this product, which not long ago received FDA approval. It has also been granted CE Mark approval for the sale of MelaFind in the European Union. These approvals could be key to driving major revenue for this little-known company and that along with the end of seasonal tax-loss selling could be what is fueling signs of a recent momentum shift in the stock.

MELA shares were trading around $3 in November, but the shares appear to have been impacted by tax-loss selling in late December. However, the stock has started to rebound from recent lows on much higher than average volume. According to Yahoo Finance, MELA shares have an average daily volume of about 217,000 shares (for the last three months). However, in the past couple of days, the volume has jumped to well over 1 million shares and the stock has bounced off recent lows. This could be signaling a coming rebound in the share price.

I recently wrote about the takeover potential this stock might have as well as the possibility for a short-squeeze, as well as the fact that MelaFind was selected as a top innovation for 2013 by the Cleveland Clinic, and the potential risks. Another article published (on January 8, 2013) by Stockpickr.com, highlighted the recent volume increase in MELA shares, and said that this oversold stock could be poised to technically breakout to the upside. It stated: "If that breakout triggers soon, then MELA will set up to re-test or possibly take out its next major overhead resistance levels at $2.25 to its 50-day moving average at $2.33. Any move above $2.33 would then put $2.50 into focus for shares of MELA."

Based on this, MELA shares appear undervalued and poised for a rebound rally from a technical and fundamental point of view. Longer-term, the shares have even more upside as analysts at WBB Securities rate the shares as a "speculative buy" and set a $4 price target. It's also worth noting that Mela Sciences will be presenting at the upcoming Needham Growth Conference on January 16, and that presentation could provide additional insight into strategic plans for this company in 2013.

Key Data Points For Mela Sciences From Yahoo Finance:
Current Share Price: $1.85
52-Week Range: $1.65 to $5.13
Dividend: none

Data sourced from Yahoo Finance. No guarantees or representations are made.

Disclaimer: Please consult a financial advisor before making investments.

Source: With Tax-Loss Selling Over, These Below $7 Medical Device Stocks Are Heating Up