It’s the end of 2017, which means another tax year is about to end. For investors that means a few things.
First, it means that time is growing short to offset your capital gains by looking for under-performing stocks that you can dump to offset those gains.
Second, it means you need to look at your portfolio and make sure the stocks that got you through 2017 are up to the task in 2018.
The market leaders have shifted since the first half of year.
It’s a good time to assess if you’re ready to rotate into new, promising sectors.
Third, there’s a very big plate of issues on Congress’ agenda after they come back from Christmas break, including what to do with Obamacare.
One way or another healthcare is going to see some big changes, so it’s a good time to position yourself in solid healthcare firms that will win, regardless of Washington.
The following are my top seven A-rated healthcare stocks to buy now.
Healthcare Stocks to Buy: Zoetis Inc (ZTS)
Zoetis Inc (NYSE:ZTS) is a healthcare firm completely outside the Obamacare loop. But it’s in a very important and growing sector all the same.
ZTS makes vaccines and animal health medicines for livestock and companion animals. Having both sides of the animal health market means ZTS has exposure to both rock-solid markets.
Spending on companion animals — dogs, cats, horses — continues to rise. And much of that spending is now on preventative care for these animals. Better to get an animal a vaccine for Lyme disease than have to eventually treat them for the disease.
Up 34% this year, this is going to be a steady grower for a long time to come.
Healthcare Stocks to Buy: Nektar Therapeutics (NKTR)
Nektar Therapeutics (NASDAQ:NKTR) is up 150% in the past 3 months. It was up 124% in November alone.
Why? It has a couple tigers by the tail. First, its Q3 numbers came in big because it received a $150 million payment from Eli Lilly and Co (NYSE:LLY) as an upfront payment for NKTR drug they’ve partnered on.
Second, it has another drug its developing that is an opioid that releases across the blood-brain barrier more slowly, so users have less a feeling of euphoria, which may help cut down on the attraction of opioid addiction.
Finally, one of its pipeline cancer drugs showed very strong results in combination with Opdivo for metastatic melanoma patients.
That’s a lot of news in one month. And all of it good. There’s a lot of promise here.
Healthcare Stocks to Buy: Illumina, Inc. (ILMN)
Illumina, Inc. (NASDAQ: ILMN) is one of those next-generation biotechs that specializes in genetic testing and sequencing products and services.
That may sound specialized, but this is really the next step for developing treatments for current patients and being able to analyze and modify genes for new medicines and treatment regimens.
ILMN stock is up better than 65% this year because it launched a new series of products that are some of the most in-demand pieces of equipment in the genetics sector today.
And this isn’t a one-off year for ILMN stock. Over the past five years, ILMN stock is averaging better than 60% annual growth. And this trend is just in the early stages.
Healthcare Stocks to Buy: Intuitive Surgical, Inc. (ISRG)
Intuitive Surgical, Inc. (NASDAQ:ISRG) is best known for its da Vinci Surgical Systems, which it launched in 2000. These are essentially operating robots — with surgeons’ oversight and assistance of course — that cost anywhere between $500,000 to more than $2 million.
It’s easy to assume that selling da Vincis is where the firm makes its money. But that isn’t the case. Much like other big ticket items, it’s the follow up sales where the money is really made.
For example, car dealerships don’t make a lot on the cars. They sell the cars at relatively low margins, but incentivize buyers to bring the car in for maintenance. It’s the margins in the repair and maintenance shop that drive car dealership’s profitability.
So it is with ISRG. It’s the parts and maintenance where it makes its regular, high-margin revenue. And as you can imagine, there’s a lot of equipment that needs to be cleaned, upgraded, replaced and repaired when you’re using a surgical robot.
Up 72% year-to-date, ISRG is only getting started.
Healthcare Stocks to Buy: PRA Health Sciences Inc (PRAH)
PRA Health Sciences Inc (NASDAQ:PRAH) is in one of the newer sectors in the biotech and pharmaceutical space.
Now that a number of firms continue to pop up with novel ideas for new medicines, there is a growing niche for companies that specialize in clinical development and testing for those companies.
For example, say a university research team gets approval to spin off a drug they’ve been researching and launch it as a drug. With no particular infrastructure to get it through drug trials, it needs to find a lab that it can hire to do that.
And in comes PRAH. The same scenario works for small (and large) drug firms that simply want to focus resources on development and contract out testing.
This is the reason PRAH stock’s 60% rise YTD is a good sign of things to come.
Healthcare Stocks to Buy: Abiomed, Inc. (ABMD)
Abiomed, Inc. (NASDAQ:ABMD) developed the first artificial heart in 1981. And today, it’s still sticking with doing everything it can to improve patients’ cardiovascular health.
By its own description, the company is “a leading provider of medical devices that provide circulatory support.” That’s it.
It’s not too complicated. But now, its Impella line of heart pumps are incredibly small and easy to insert. And as the leader in the industry, it is very popular the world over.
Plus, it’s one of those sectors where there’s little competition, since surgeons aren’t going to look for an off-brand model and hope it works.
It’s focus also helps you diversify your portfolio, since it allows you to buy into a specific device for a specific organ. Its 68% rise YTD is also encouraging.
Healthcare Stocks to Buy: Mazor Robotics Ltd – ADR (MZOR)
Mazor Robotics Ltd – ADR (NASDAQ:MZOR) is an Israel-based surgical robotics firm that specializes in spinal procedures. It is distributed by Medtronic PLC (NYSE:MDT), a global medical device firm with a corporate headquarters in Dublin, Ireland and its operational headquarters in Minnesota.
At a $1.4 billion market cap, MZOR is about 1% the size of MDT, which is why it has linked up with the medical device giant.
MZOR is attractive because its Mazor X and Renaissance machines are multi-purpose tools to help surgeons with delicate operations. Since spinal surgeries can be high-risk procedures, having this equipment helps hospitals and surgeons increase their chances of getting it right, which is a win for all sides.
Both systems are approved for use in Europe and the U.S and each costs about $850,000. At this point, MDT is financially carrying MZOR and its growth has been volatile.
But given its partner, the promise is there.
— Louis Navellier
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Source: Investor Place