It’s time to buy these stocks now…
Nobody is paying attention… but one sector of the stock market is an incredible opportunity right now.
In the last big bull market in this sector, this entire sector gained 1,451%. The big names in the sector rose by thousands of percent. And yet today, we can buy in at 1984 values.
Now, for the first time in over a quarter of a century, all of the “setup” conditions that we look for are in place in this sector… It’s just perfect.
Stocks in this sector are:
1. Dirt cheap, as cheap as they’ve been since 1984
2. Ignored
3. In a legitimate uptrend
This sector is set for a dramatic, multi-year bull market. Let me explain…
[ad#Google Adsense 336×280-IA]The last great bull market in this sector was 1984 to 1999. Even the household names in this sector soared. Johnson & Johnson rose 2,393%. Pfizer rose 3,289%. Merck rose 3,018%. Lesser-known Amgen rose an astounding 31,150%.
Obviously, I’m talking about health care stocks. Since 1999, these stock prices have done nothing. But the earnings have grown. So now the stocks are cheap.
This chart below from my True Wealth Systems service tells the story…
You want to buy health care stocks like Johnson & Johnson when the dividend yield is high (when the stock is cheap). That’s when you make the thousand-percent gains over time. The last time Johnson & Johnson’s yield was this high was – you guessed it – in 1984, the start of the last great boom in health care stocks.
As you can see, the dividend yield on Johnson & Johnson was low in 1972 and in 1999. If you bought when the dividend was low, you suffered over a decade of essentially no gains. But if you bought when the dividend was high – like in 1984 – you could have made a lot of money. Today, Johnson & Johnson is as cheap as it was in 1984.
It’s not just Johnson & Johnson… It’s across the board in this sector.
Drug stocks are as cheap as they’ve been since 1984. Take a look at this table, which appeared in True Wealth Systems a few weeks ago:
It’s clear, the stocks are cheap!
As for ignored… I find it astounding. Yesterday, a $29 billion merger was announced in this sector… and nobody noticed. Investors were too busy worrying about Greece, the U.S. debt limit, gold, Apple’s great earnings, you name it.
This deal tells me the sector is ignored… And that means it has a LOT of upside potential left in it.
As for the uptrend, it looks GREAT. Health care stocks as a group – as measured by the iShares Dow Jones Healthcare Sector Index Fund (IYH) – have beaten the overall stock market this year and are knocking on the door of all-time highs.
This “stealth” bull market looks great. It’s supercheap, in a fantastic uptrend, and nobody cares. It’s the perfect setup.
[ad#article-bottom]The easiest and safest way to invest is to buy shares of IYH… It’s top four holdings are Johnson & Johnson (11.8%), Pfizer (10.4%), Merck (7.1%), and Abbott Labs (5.4%).
Those four stocks are all in the table above, showing just how cheap health care stocks are today. (The two stocks involved in that $29 billion deal are also in this fund.)
It’s time for health care stocks to soar. The last health care bull market delivered quadruple-digit gains. We’re looking at the same names, at the same valuations, as we saw in 1984.
I believe that this stealth bull market in health care stocks has a LOT farther to go… Get on board today, if you’re not already.
Good investing,
— Steve Sjuggerud
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Source: Daily Wealth