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.
Treatment of Cardiovascular diseases. They’re on to a new way of looking at HDL treatment. Still pre-clinical. Prefers biotech that is at least in phase 2 trials. Too expensive.
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.
A really neat little company. Good funding of their R&D. They have revenue and operating profits. Agreement with Cardinal will be good for getting tests done in US.
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.
Been around for a long time. Has a broad range of technologies. Have recently signed licensed for Virusmax, which can double the yield of virus production for vaccinations. Bull semen-sexing technology. Have some very interesting technologies. Watching it very closely. Like the company.
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 do recommend it in one of their portfolios. The health monitoring business is growing and he would like to see more contracts signed. There are risks as this has a high valuation. He likes the management team. It is a speculative buy.
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.
They produce a gene-editing tool that splices DNA that has the potential of curing diseases such as Huntington's Chorea and cancer. It's new technology, but he can't think of another company doing this. This segment is very rich and a trading opportunity at best.
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.
Loves the biotech sector right now. If he had to invest money in one sector right now, it would be Biotechs. He likes this company. They are positioned very well.
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.
Seasonality on this is from around the middle of April through until September. This has a lot to do with the large number of healthcare conferences being held in the summer. Technically it has already started an upward trend.
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.
The valuation continues to get lower and lower. They have a lot of cash. Their HEP-C and HIV businesses were 50/50 and now the HEP-C business is only 25%. The new CEO coming is to spend some of the cash intelligently. (Analysts’ target: $88.05).
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.
It's a machine that makes acquisitions which generate revenues worldwide. However, they lack growth and a presence in oncology though they recenly made an aquisition that can help growth. Expect modest growth, but limited downside too if a clinical trial fails. Good dividend and balance sheet. Good to hol.
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.
(Market Call Minute.) One of the better growth stories in the US biotech side. They have more of a product portfolio and they have cash. Valuation is in line with the market.
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.
(A Top Pick Aug 10/17, Down 1%) It went back down to where he recommended it. He still really likes the company. They were put back into second place so the stock came down. He thinks investors should consider buy it again. It was almost a Top Pick.
Novartis AG (NVS-N)
One of the largest multinational Swiss pharmaceutical company. They are refocusing on generic drugs and have sold their ophthalmology business.
Healthcare. Has a decent vaccine business as well as a decent generics business. This would be a good solid hold. Organic growth will have to be a big part of the equation in order to continue to grow EPS. Good stock.
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.
They create drugs similar to other bio-similar drugs. The competitive threats in biologics are a little bit similar. They got approval this morning for a biologic drug. He would like to see them consolidate here.
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.
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.
Been undergoing struggles with patent expiry and competition. Massive R&D budget and it is hard to know when they will have the next block buster drug. A good blue chip name to own. JNJ might be a safer way to participate.
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 May 13/16. Up 2%.) The leading medical device company. He owns it because they have a plethora of products right across the range. They had a bit of an earnings hit in the 3rd quarter, and he bought more. He has a $92 target on this.
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.
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%
She continues to hold it and likes it. They have done well this year so she would wait for a pull back to add to this position. They are good at taking costs out. They always increase their dividend and it should continue. A good core holding.
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.
Merely an okay last quarter with cost increases and more debt after an acquisition. Resin cost inputs are worth watching. Trades at 18x earnings. Watching this closely. Neutral.
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.
They do knee and hip replacements. SYK are active in tuck-in acquisitions which is quite accretive. They trade at a decent valuation. A consistent stock performer.
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.
Protective gear for epidemics. Based in Ontario. Revenues are normally north of $40 million but with the last wave of paranoia, revenues went up to over $60 million. His target is $3.34, which is seems to regularly hit. No debt and have money in the bank. Have been buying shares back.