INVACARE CORP. $15 (New York symbol IVC; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 32.2 million; Market cap: $483.0 million; WSSF Rating: Average) makes wheelchairs, motorized scooters and other mobility and home care products.

Many of Invacare’s customers rely on reimbursements from the Medicare and Medicaid programs to fund purchases of motorized wheelchairs and breathing apparatus. Due to new restrictions on payouts, Invacare’s stock has dropped by 70% since 2004.

The U.S. government recently delayed further changes to the Medicare and Medicaid plans. Still, the ongoing uncertainty forced Invacare to aggressively restructure its operations, including shifting production to low-cost countries and simplifying its product lines. These measures should cut its annual costs by $20 million.

It looks like Invacare’s plan is starting to pay off. In the three months ended September 30, 2008, earnings before unusual items rose 23.5% to $0.42 a share (total $13.4 million) from $0.34 a share ($10.8 million) a year earlier. Sales grew 13.4%, to $461.8 million from $407.3 million.

Invacare spends much less on research than Bard, Baxter and Beckman — typically around 1.5% of its revenue. That’s because its focuses mainly on improving the design of its current products, rather than developing new ones.

Invacare’s long-term debt of $504.2 million is 12% more than its market cap. But its restructuring should help free up more cash for debt repayments. Invacare now holds cash of $37.5 million or $1.17 a share.

International markets supply 40% of Invacare’s sales, so the rising U.S. dollar could hurt its earnings. Still, the stock trades at just 11.1 times its likely 2008 earnings of $1.35 a share. The $0.05 dividend yields 0.3%.

Invacare is a buy.