It was only last week when the markets had a relief rally, partially based on the fact that presidential candidate Sen. Bernie Sanders, while still in it, was no longer the front runner.
Why?
Because a single-payer healthcare system would have meant massive changes to the for-profit healthcare insurers.
Many of the major insurers were up 10% or more that day.
But the next day, the other shoe dropped.
If the coronavirus from China does hit the U.S. hard, these insurers and the hospitals are going to take a financial beating.
In all this turmoil, there should be opportunity. And there is. I used my Portfolio Grader that I use to find Growth Investor plays to find seven healthcare stocks worth your time — and money.
All of them are A or B-rated and have solid financials now, and moving forward. There are no insurers among the group, but they represent pockets of opportunity in various sectors of the industry.
Healthcare Stocks: CollPlant Biotechnologies (CLGN)
CollPlant Biotechnologies (NASDAQ:CLGN) is an Israel-based company that is focusing on the future of tissue repair and wound care.
It uses a plant-based collagen as a scaffold to build new tissue and eventually, new organs. The collagen is almost exactly the type the body produces so there is no issue with rejection.
Currently — and wisely — its first two products are focused on aesthetic surgery. It has an injection for filling wrinkles and another for breast implants.
That means it is generating some revenue as it ramps up more costly testing for its medical products, which would target wound care and tissue repair. And it just signed a new partnership with a company that specializes in 3D scaffolding technology, that can “build” organs and larger tissue.
The stock is up 90% year-to-date. But its market capitalization is only $58 million, so don’t chase it too far from its current price.
Natera (NTRA)
Natera (NASDAQ:NTRA) is a company that is on the cutting edge of genetic testing.
Founded in 2003, it has been one of the pioneers in this widening field. And it has seen how technology has advanced to take this science from a pretty humble beginning to a much bigger market with significant impact.
Natera currently provides genetic testing for oncology, organ transplantation and women’s health. In each of these fields genetic testing provides a much clear picture of how to treat each individual patient for higher success outcomes.
By better understanding each patient, it is now possible to customize treatments for better safety and efficacy. And for women, it means knowing whether there are any issues that may crop up during pregnancy.
What’s even better news for the company is that Medicare is now covering more of its procedures, which means doctors can use the testing more often to help outcomes.
NTRA has a $2.7 billion market cap and is up 120% in the past year. At Growth Investor, these are the kind of returns we’re targeting in all sorts of revolutionary industries that are reshaping our world.
DaVita (DVA)
DaVita (NYSE:DVA) is one of the leading dialysis companies in the world. It is a major player in the U.S. and also has operations in 10 other countries.
Kidney disease is generally caused by other chronic illnesses like diabetes, where after years of managing swings in insulin and sugars, kidneys get weaker and, in some people, become a problem themselves.
Also, given that a recent study has shown that up to 40% of the adult U.S. population is considerably overweight, issues with kidneys are very real. They are the filtration system for the body. While you can live with only one, you can’t live without both.
As populations here and in other countries get older, the demand for companies like DVA will increase.
And regardless of what happens to healthcare, companies like DVA will be a central solution.
DVA stock is up 55% in the past 12 months yet its current price-earnings ratio is a mere 14. And this company has a market cap of $10 billion, so it’s still a bargain.
Quest Diagnostics (DGX)
Quest Diagnostics (NYSE:DGX) is one of the leading U.S. diagnostic labs and has been in operation since 1967. It offers services to patients, doctors, hospitals and even corporations.
This is one of those healthcare sectors that will continue to do well regardless of what happens to healthcare in the U.S. This is one of those front-line sectors that is important in establishing treatments for individuals before, during and after treatments or surgeries.
One thing the Affordable Care Act did change for the better is its focus on outcome-based systems. And diagnostics is one of the foundations of outcome-based care. The more information you have on your patient, the more successful treatment can be. It’s also an approach that tends to pay off for investors, which is why this kind of company tends to do well in my Growth Investor system.
DGX stock is up nearly 30% in the past year yet it still trades at a current P/E of 17. And it delivers a decent 2% dividend.
ResMed (RMD)
ResMed (NYSE:RMD) is another company that serves Americans that are having sleep issues due to other physical ailments.
It’s all about respiration. RMD manufactures and sells medical devices that help people get a good night’s sleep, whether in a clinical setting or in their own homes.
Most notably, it’s a leading provider of CPAP machines for people that have sleep apnea. But it also provides portable oxygen machines and ventilation equipment. Its products and services span the consumer, institutional and hospital markets.
And again, a graying population means that these types of products and services grow in demand, just by simple math. It’s also another bulletproof sector regardless of healthcare changes.
The stock is up nearly 55% in the past year, which isn’t bad for a company sporting a $22.5 billion market cap. It also provides a CD-competitive dividend of 0.9%.
Zoetis (ZTS)
Zoetis (NYSE:ZTS) stock is up nearly 5% in the past week. Given the kind of selling we’re seeing, that’s pretty impressive.
What is its secret?
Its an animal health company that focuses on medicines and diagnostic equipment for both domestic animals as well as livestock. And this became a very big deal when China reported its outbreak of African swine fever.
China is the world’s biggest consumer of pork and it had to cull half of its animals. ZTS is working on a vaccine. It also just got approval for a pill in the U.S. that protects dogs against diseases carried by many fleas, ticks and mosquitoes. That will add another $150 million in revenue in the next year.
Also, the numbers are in its favor when it comes to spending on pet healthcare. It’s up around the world. And given the fact that there are now questions on whether the coronavirus could be carried by pets, another big market could open up quickly.
The stock is up 44% this past year (even better for my subscribers in Growth Investor, where I’d been recommending it for awhile) and things are still looking, well, healthy.
Novo Nordisk (NVO)
Novo Nordisk (NYSE:NVO) is the world’s largest producers of insulin. It’s also one of the world’s leading pharmaceutical companies in the treatment of diabetes.
This Denmark-based company is also a big player in growth hormone therapy and hormone replacement therapy.
It’s also unique in that the majority shareholder is the company itself and it retains 45% of the voting rights. This may prevent the company from wild expansion and merger deals but it keeps it focused and profitable on a consistent basis.
For example, in the past three years it has a pretty stable growth chart and the stock has averaged 27% a year during that time. And the past 12 months echo that performance, up 23%.
This won’t be a major gainer, but it is a stable grower and a rock in volatile times.
That being said … at a certain point, we do need decent gains — without taking big risks. That’s what my Portfolio Grader is designed to produce. And there’s one industry now that looks especially compelling.
— Louis Navellier
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Source: Investor Place