Opinions
Cameron Hurst
ISHARES DOW JONES US MEDICAL DEV.(ETF)
IHI-N
TOP PICK
May 09, 2018
$193.520
Stock price when the opinion was issued
E.T.F.'s
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BUY
Not overly bullish on healthcare as a whole, as its growth may be less attractive. Likes medical devices, with a built-in backlog due to Covid. He owns SYK. There should be a significant pickup in procedures over the next 2 years. SYK has strong earnings growth, near a 1-year high. Also look at IHI, the medical devices ETF, packed with companies leading the healthcare sector.
E.T.F.'s
BUY
Allan Tong’s Discover Picks IHI's MER is actually higher (at 0.39%) than the yield it pays (0.3%). Like the other names here, IHI trades at a low beta, 0.86 to be precise. So, if you're not buying this for income, what's the growth? Let's look at IHI's largest holdings. TMO offers diversity among lab testing, lab equipment and diagnostics and typically trades at a premium multiple. TMO was a hit in the Covid-testing days, but that stereotype has stuck with them. The company reported a strong quarter a month ago, but that didn't move the needle. TMO shares have been choppy but rangebound all year, but if Wall Street gets gospel on TMO, share should pop. The price target is 20% higher at $674. Read 3 Best U.S. Healthcare ETFs for our full analysis.
E.T.F.'s
Think of this as the down the middle pick – good technical momentum with a beta of 1 of high quality holdings. Its revenues growth should be good in the second half of the year backed by good demographics and growth in China.