A Stifel Nicolaus analyst initiated coverage of a group of medical device makers on Thursday, outlining a mixed business environment for the sector.

Analyst Charles Chon placed "Hold" ratings on Medtronic Inc., which is the world's largest medical device company, along with Boston Scientific Corp. and St. Jude Medical Inc. He said weakness in key markets like drug-coated stents and implantable heart devices will continue to hurt Medtronic and Boston Scientific. Boston Scientific is also trying to bounce back from a major recall of some of its devices earlier this year.

St. Jude experienced strong growth this year, but it's less clear what will happen in 2011, he said.

Chon also rates shares of orthopedic device makers Stryker Corp. and Wright Medical Group Inc. at "Hold." He established "Buy" ratings on shares of spinal device maker Alphatec Holdings Inc., orthopedic implant maker Zimmer Holdings Inc., and NuVasive Inc., which makes systems used in minimally invasive surgeries.

The analyst said Alphatec's second-quarter results were disappointing, but Wall Street's current expectations may be conservative. Alphatec's recent acquisition of Scient'x Groupe SAS could boost sales outside the U.S. significantly. He said Zimmer's sales could grow faster than those of its competitors because of newly launched products, while NuVasive could experience strong demand.

In afternoon trading, Alphatec stock rose 19 cents, or 9.1 percent, to $2.28. Zimmer shares added 93 cents, or 2 percent, to $48.63, and NuVasive stock picked up 36 cents to $30.47.

Shares of Boston Scientific rose 11 cents, or 2.1 percent, to $5.24, while Medtronic shares gained 18 cents to $32.38 and St. Jude stock declined 32 cents to $35.17.