During the 2016 U.S. Presidential Election the topic of healthcare of was heavily debated. Even the best healthcare stocks were receiving negative press for their price gouging methods. In 2015, Turing Pharmaceuticals, lead by CEO Martin Shrekli, caused a media uproar when it increased the price of its drug from $13.50 to $750 overnight.
The system was broken. Donald Trump went as far as to say that Obamacare was a “disaster.” This type of uncertainty caused healthcare related stocks to sell-off. However, despite what political stance pundits have, healthcare is a necessity in America.
Demand is on the rise due to an aging population. In addition, American diets have become so poor that its lead to higher cases of diabetes and heart disease.
That said, despite what lawmakers decide the healthcare sector should continue to see growth in the coming years.
Best Healthcare Stocks
There are many healthcare stocks that trade on the national exchanges but here are four that have some of the strongest investment profiles in the space.
Celgene (CELG): Founded in the 1980s this firm has developed several products to treat various cancers and inflammatory diseases. Its product line includes: Abraxane, IDHIFA, ISTODAX, OTEZLA, POMALYST, REVLIMID, THALOMID, and VIDAZA to name a few. With a market cap exceeding $80B and a member of the S&P 500, Celgene should remain on the cutting edge of cancer treatment therapies.
Johnson & Johnson (JNJ): A conglomerate in the healthcare space who has been around since the late 1880s. It’s product line stretches across consumer healthcare, medical devices and pharmaceuticals. The company owns Tylenol, Motrin, Band-Aid, Benadryl, and Listerine. Johnson & Johnson is involved in: cardiovascular and metabolic disease, pulmonary hypertension, infectious diseases and vaccines, neuroscience, and oncology just to name a few of its areas of interest. The firm is a member of the Dow 30 and has a market cap exceeding $350B.
Pfizer (PFE): Also a member of the Dow 30, Pfizer discovers, develops, manufactures, and sells healthcare products. The firm has two units: Pfizer Innovative Health (IH) and Pfizer Essential Health (EH). Some of its most popular products include: Prevnar 13, Xeljanz, Eliquis, Lyrica, Enbrel, Viagra, Ibrance, Xtandi, and Advil. In additition, it provides products under the Lipitor, Premarin family, Norvasc, Lyrica, Celebrex, and Pristiq brand names. Pfizer’s customers include wholesalers, retailers, hospitals, clinics, government agencies, pharmacies, and centers for disease control and prevention. With a market cap exceeding $200B and sales in the tens of billions annually it’s one of the largest players in the space.
Merck (MRK): A member of the Dow 30 and S&P 500, Merck operates in four segments: Pharmaceutical, Animal Health, Healthcare Services, and Alliances segments. Its products help treat: asthma, type 2 diabetes, chronic hepatitis C virus, HIV-I infection, arthritis and pain, osteoporosis, hypertension, and nasal allergy symptoms just to name a few.
How To Find The Best Healthcare Stocks
The healthcare sector is very broad. However, large companies have a distinct advantage because they typically have diversified portfolios. On the other hand, small cap healthcare stocks may offer greater reward but investors must have the stomach to deal with the volatility. For example, if a drug fails to get FDA approval and the company doesn’t have other drugs in the pipeline it could severely damage the value of its share price.
It’s important to pay attention to politics, especially if you’re looking to invest in a healthcare benefits company. Also, take the time to visit the FDA.ORG, the website for the U.S. Food & Drug Administration. If your interest lies more in trading, you’ll want to pay attention to the FDA calendar, a good website to visit for that is biopharmcatalyst.com. Keep in mind trading drug healthcare stocks around an upcoming event can be extremely volatile.
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