Opinions
Terry Shaunessy
ISHARES DOW JONES US MEDICAL DEV.(ETF)
IHI-N
DON'T BUY
Jul 13, 2018
$206.630
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
Medical devices have been fantastic the last 5 years. Like tech, we’re there already. PE is 40x, so a lot of the growth has already happened. It’s just too late.