Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
The healthcare industry is one of the pillars of the American economy and various countries across the world. Many stocks in the sector are valuable for the long-term, and some have even outperformed throughout 2020.
Best Healthcare Stocks to Buy
The pandemic will only put more pressure on the industry, but the business is expected to go up as well. With second waves of the coronavirus looking very likely, expect the healthcare industry to have its hands full. The top stocks in the biotech industry have also flourished in these times, signaling faith from investors.
That’s not to mention that the healthcare industry is undergoing a revolution because of COVID-19 efforts. With the stock market’s current bullish sentiment and a race for a COVID-19 vaccine, there’s a lot to be gained for both short and long-term investors.
We’ve looked at the three best healthcare stocks that are valued at affordable prices. Pharmaceutical and biotech companies are doing relatively well amidst the turmoil of the pandemic, making them worth reviewing. Here’s why we think these top healthcare stocks are worth looking into:
Pfizer is a very well-known multinational pharmaceutical company. It is one of the largest of its kind globally and ranked 57 on the Fortune 500 list. From 2004 to 2020, the company was part of the Dow Jones index, though it has since been replaced. The company produces medicines and vaccines, some of which are widely used, like Lipitor, Zithromax, and Viagra.
Pfizer is also involved in the race to create an effective, scalable COVID-19 vaccine. The company partnered with Germany’s BioNTech in March to that end. It has signed agreements with the US and Europe, among others, and hopes to distribute up to 1.3 billion shots. This remains a work in progress, but could boost the stock price significantly.
In its Q2 2020 report, Pfizer revealed a revenue of $11.8 billion, down 11% or $1.5 billion from Q2 2019.
Current EPS is at $0.61, a 31.46% decline year-over-year.
Pfizer’s biopharma business grew by 9%, largely due to key brands.
On the whole, overall performance in the first half of 2020 was good, according to CEO Albert Bourla.
Collegium Pharmaceutical is a specialty pharma company that focuses on treatments for pain management. The company cites the opioid epidemic of the United States as being a driving factor in its R&D philosophy. It manufactures medication such as Xtampza and Nucynta.
Multiple products saw growth in prescriptions, representing a 20+% increase in some cases. The company’s executives have said that debt payment would begin with the increased cash flow. They also stated that 2020 would be a “financially transformative year.”
Collegium Pharmaceutical missed some estimates in its Q2 2020 report, and reported a net income of $8.1 million.
The company’s EPS stands at $-0.01 and recorded a revenue of $76.5 million.
The company also recently announced a settlement in a legal case with Teva Pharmaceutical USA.
InMode is the least well-known of the stocks listed here, but it has been getting attention recently. The company manufactures minimally medical products for face, body, and skin issues. The strong performance of the stock and financial figures have analysts bullish for this pharma stock.
While the company saw revenue lower by 21% compared to the same period last year, it still beat expectations. InMode recorded a profit of $8.6 million. The company looks good as economies attempt to recover from the pandemic’s worst effects.
The stock price has increased in the past few months, jumping 12.9% in early September.
In its Q2 2020 report, the company’s EPS beat expectations by $0.03, and revenue beat expectations by $0.36 million.
Earnings have grown by 47.9% year over year, and are forecast to increase by 22.49%
Several healthcare stocks have outperformed market averages and analysts are generally optimistic. In a time of grave medical concern like this, it’s worthwhile looking deeply into related stocks. If you haven’t already, now looks like a good time to get started.
As you have seen, some stocks show promising signs of growth — and these aren’t the only ones. With elections just around the corner, many believe there is significant opportunity if Trump is re-elected. COVID-19 has caused significant volatility in financial markets this year, bringing risk — but also opportunity.
Do you have any recommendations of your own? What sectors are good besides healthcare? Let us know in the comments below.
Disclosure:Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firms specializing in sensing, protection and control solutions.