The medical space has been a hot sector these past few years, and have widely outperformed the market. These sectors are defensive as they are not tied to an economic cycle. Furthermore, medical, biotech and gene-editing firms will profit from the aging population and growing need for these services and drugs.
Recently, the sector has pulled back due to promises by the US government to lower drug prices and further regulate the sector. However, it seems analysts are still bullish for the sector. The next election cycle will be a key turning point for these stocks.
👩⚕️ Biotechnology & Medical Research
Resverlogix Corp. (RVX-T)
A clinical biotechnology company that develops epigenetic drugs that treats neurodegenerative diseases, diabetes and other chronic illnesses. They are currently paying down debt.
(Market Call Minute.)Reversing of bad cholesterol in clinical studies. A little early for him but has potential. Speculative.
Spectral Med Inc (EDT-T)
A multinational company that specializes in endotoxin activity assay (EAA) diagnostic and therapy services. The EAA diagnostic product is their main revenue driver.
There is nothing more powerful than a base breakout, and this had one in February of this year. This one is on a trend line right now and there is absolutely nothing wrong with the chart.
Microbix Biosystems (MBX-T)
A biomedical testing company that saw earnings up 40% last quarter. They are increasing capacity and is trading at a reasonable PE. Robert McWhirter choses it as a top pick in May.
He still likes it and holds it. It makes cell culture measurements. They moved over to a more economical method for making their products and this will benefit their profitability. They have a division up for sale and they might get lucky and get a sale before year-end.
Reliq Health Techniques (RHT-X)
A software as a service solution company for remote patient monitoring, telemedicine and collaborative care. The stock experienced a pullback but it is starting to recover due to their long-term potential.
They said they will be cash flow positive moving into 2020. If they have the growth rate they are projecting, then you will see the stock start to move again. Right now it is in the penalty box.
Neptune Wellness Solutions Inc. (NEPT-T)
A nutrition products company that focuses on unique nutrition solutions with specialty ingredients. They are shifting their focus from krill oil extraction to cannabis oil.
For years NEPT was in partnerships where they were extracting Omega-3 oils from krill oil and selling that to consumers. Now they're taking that extraction technology and applying it to the cannabis oil market. He's in a wait-and-see spots. The fundamentals don't back the move up in the stock. He has a small short on…
CRISPR Therapeutics AG (CRSP-Q)
A small cap company that develops gene medication. They recently closed a deal with a pharma company that will help scale their products.
A small company that develops transformative gene medications. They are a small fish in a big sea. A recent transaction with a pharma company allows them to scale out their product, but it is still early. (Analysts’ price target is $58.05)
Regeneron Pharmaceuticals Inc (REGN-Q)
A biotech company. That has several core products generating good free cash flow. Their partners include Sanofi to treat severe asthma. Paul MacDonald chose it as a Top Pick in July.
A higher-risk/return play. This biotech has several core products generating good free cash flow. They’re partnering with Sanofi on Dupixent to treatment severe atopic dermatitis and potentially severe asthma. They also have another drug to treat specific eye diseases. REGN boasts various late-stage drug trials. Regeneron is a new Top Pick for us, driven by…
First Trust Biotechnology Index Fund (FBT-N)
An investment fund that corresponds to the NYSE Arca Biotechnology IndexSM. It tracks the performance of small, mid and large cap companies in the biotech industry.
(A Top Pick May 8/17. Up 11.02%.) The period of seasonal strength for this is usually early May right through until the middle of July. We have reached the point where seasonality no longer applies. Now is a good time to take the money off the table.
Gilead Sciences Inc. (GILD-Q)
A pharmaceutical company that produces high priced drugs for hepatitis C and HIV. It trades at less than 9 times earnings with a 4% yield.
It's a little speculative, because they could invent the coronavirus vaccine. In the past they found the hepatitis C cure. Gilead did very well until a few years ago. Now, their earnings and stock are half of their historic peak.
Pfizer Inc (PFE-N)
An American pharmaceutical corporation that produces a variety of well known drugs. The seasonal weakness is in mid-October. It is currently consolidating and is sure to appreciate in the near future.
Legislation handcuffs big pharma by letting patents expire and turn to generics. This stops these companies from growing revenue. Big pharma has to keep hitting home runs to survive. When they can't, they cut costs or amalgamate them. He prefers biotechs.
Biogen IDEC Inc. (BIIB-Q)
A multinational biotechnology company that treats neurodegenerative diseases using innovative techniques. This was dragged down along with the whole sector. They experienced a pullback after they closed an Alzheimer study that caught the market by surprise.
The sector has done poorly, and the summer is seasonality. A lot of this has to do with the US election campaign with candidates offering cheap/free healthcare. BIIB fell below support at $250. He is avoiding the entire space.
Bristol Myers Squibb (BMY-N)
A large cap American pharma company that produces prescription drugs for several therapeutic areas. Their latest drugs haven’t done as well as hoped. They are currently in discussion to merge with CELG-Q.
They are focused on the drug side of health care. There is a lot pressure on costs and from a political perspective as well. The company has had a great run as of late, but drugs can be very volatile. He generally favors the equipment and insurance sectors in health care.
Novartis AG (NVS-N)
One of the largest multinational Swiss pharmaceutical company. They are refocusing on generic drugs and have sold their ophthalmology business.
He sold it recently. They sold their eye-care division and are back to generic drugs, a lousy business for all companies. Invest elsewhere.
Amgen Inc. (AMGN-Q)
A biopharmaceutical company that is the world’s largest independent biotech firm. It is considered the preeminent biotech companies with some good drugs. It trades at a 11x earning which is considered reasonable.
The biotech grandddaddy. A great company that's produced some fine drugs, but other technologies have taken the shine off this stock. New drugs haven't driven the stock up. It does trade at a reasonable 11x earnings. A decent stock and it's stable, but lacks the punch of its peers. It depends what happens in the…
Mylan Inc (MYL-Q)
A global generic and specialty pharmaceuticals company. This is the company that produces Epi Pens. Analysts are uncertain since there is a lot of headwinds on pricing and government intervention.
TEVA-N vs. MYL-Q. He does not like either at these prices. They are both generics manufacturers. There are lots of headwinds on pricing in these categories. We have had a lot of noise on pricing of pharmaceuticals. The FDA is going to alleviate the delays on getting new drugs to market. He wants to be…
Eli Lilly & Co. (LLY-N)
A global pharma company that recently made an acquisition in oncology. They recently had one of their popular drugs withdrawn. They outperformed in 2018 Q4 and they have potential blockbuster diabetes and heart disease drugs in the pipeline.
He sold it several months ago, because it outperformed like crazy in late-2018. That was expected, because healthcare is the most defensive sector and Q4 was a bear market with fears of a recession. LLY made an acquisition in oncology and one of their big drugs got withdrawn. Novo Nordisk may launch a diabetes drug…
Medical Equipment, Supplies & Distribution
Medtronic Inc (MDT-N)
The maker of the first pacemaker and several other similar devices. They are starting to enter emerging markets such as India and Bangladesh where there is a need for these devices. Michael Decter chose this as a top pick on October 2, 2019.
(A Top Pick Oct 02/19, Up 7%) They reported today and miss expectations. It's a big global company. There's global demand for their medical devices; in Asia, for instance, there's rising heart disease. So, Medtronic can fulfill this demand.
Baxter International Inc (BAX-N)
A Fortune 500 health care company. The dividend is very high though current valuations are quite rich. They are focusing on new product developments that generates good growth.
Top healthcare pick. Valuation is rich, though the dividend is decent. He will suggest a better stock in Top Picks.
Abbott Labs (ABT-N)
A multinational diversified healthcare company. It hasn’t been impacted by the focus on drug pricing. It sells generic dugs to emerging markets. They also have a great track record of dividend increases with a yield of 1.5%
(A Top Pick Jan 10/19, Up 25%) A diversified healthcare company that's done well. They sell generic drugs to higher-growth EM (40% of revenues); adult and child nutritional products; and medical products which is showing profit momentum driven by product launches. Aging demographics favour ABT. They don't suffer US drug pricing issues, either. They've increased…
Becton Dickinson (BDX-N)
A medtech company that manufactures medical devices, instrument systems and reagents. It is in medical supplies, not drugs, and supplies primarily to hospitals. A product under FDA review has made the price pull back. They have a good record of dividend appreciation and have opportunities ahead. Barry Schwartz chose it as a top pick on June 24, 2019.
Investing in healthcare is hard. He holds BDX which he sees it as the shopping mall of healthcare products. He used to own ZBH but they suffered from recalls. He would probably stick to one of the three since he believes they are the best run companies in healthcare.
Stryker Corp. (SYK-N)
A Fortune 500 medtech firm. They are a leader in robotic surgery and have great organic growth. It is as defensive name since it is not tied to the economic cycle.
A great medical equipment company. Over time, they've consolidated and grown. Demographic trends are on his side. But he owns Abbott instead; you can't own everything. Wait for more of a pullback to buy. If the PE falls to the low-$20s, step in.
Alpha Pro Tech (APT-A)
A company that has a building supplies business and hospital protection business. Whenever there is a pandemic scare, this company takes off. If there is another scare, this will do well.
This is funny in terms of a long-term outlook. They have a buildings supplies business, and the hospital protection business. Whenever there is a pandemic in the works, this company takes off. It has been moving around $4 per share, and thinks it could go a fair bit higher. He would like to get $6+…