Just as we expected, shares of LeMaitre Vascular (LMAT) jumped last week after the company released a very strong quarterly earnings report. Earnings per share came in more than 10% above the analysts’ average estimate ($0.17 vs $0.15), and revenue exceeded expectations by one million dollars ($23.2 million vs $22.2 million).

That’s not a lot of money, but LeMaitre isn’t a big company (market cap of only $410 million) so the effect on its share price is the just the same. With sales of its medical products increasing 22% while operating expenses grew 15%, the company was able to generate an operating margin of 61%.

I wouldn’t be surprised to see LMAT acquired by one of the big medical products conglomerates. The Affordable Care Act has achieved its objective of stifling profits in the healthcare sector, inducing many of the bigger companies to consider buying their way into higher margin businesses such as this one. And not knowing what the regulatory environment might look like in three months when the new President takes over, we may see a flurry of M&A activity in the healthcare sector before this year is over.