Despite a tumultuous year for the healthcare sector, a few stocks have managed to catch the attention of Wall Street analysts. In fact, some of these stocks have been hit even harder than the rest of the industry.
The year hasn't been kind to the S&P 500 Health Care sector index, which has seen a decline of 3%. In stark contrast, the S&P 500 itself has experienced a substantial growth of 15.7%. Moreover, this sector index had already fallen by 3.6% last year. If it fails to recover before the end of 2023, it would be the first time in over two decades that it has seen consecutive declines for multiple years.
Every corner of the industry has been affected. The SPDR S&P Biotech ETF (ticker: XBI) has seen an 8.3% decline, while the S&P 500 Pharmaceuticals industry index has remained relatively flat. The iShares U.S. Medical Devices ETF (IHI) has also experienced a downturn of 4%.
Nevertheless, there are still opportunities for stock-picking within this sector. A handful of individual health stocks have outperformed the market this year, with notable mentions including Eli Lilly (LLY), Vertex Pharmaceuticals (VRTX), and Zoetis (ZTS).
To identify potential winners in the healthcare sector, we conducted a thorough screening of the S&P 500 stocks. Our focus was on stocks that have garnered Buy ratings from over 70% of the analysts who cover them, utilizing FactSet's reliable data.
Among the stocks that passed our screening process, some have been able to beat the market this year. However, there are also several stocks that have lagged behind even more significantly than the rest of the healthcare sector. Noteworthy members of this group include the animal medicine company Zoetis (ZTS), the insurer UnitedHealth Group (UNH), and Boston Scientific (BSX), renowned for its medical devices.
Despite the challenges faced by the healthcare sector, it is important to recognize that there are still opportunities for investors. By carefully analyzing the performance and analyst ratings of various stocks, one can uncover potential winners amidst this turbulent market.
Promising Stocks in the Life Sciences Industry
DexCom is a company that specializes in selling a glucose monitoring system to aid diabetes patients. Although not as widely recognized, its innovative product has gained attention within the medical field. With a strong focus on improving the quality of life for individuals with diabetes, DexCom is poised for future success.
Bio-Techne offers a range of tools and solutions to the life sciences industry. While it may not be a household name, Bio-Techne is making waves in the field with its cutting-edge technology and commitment to advancement. As the demand for sophisticated research tools increases, Bio-Techne is well-positioned to thrive.
Bio-Rad Laboratories (BIO)
Another key player in the life science research and diagnostics industries is Bio-Rad Laboratories. Though it may not enjoy the same level of recognition as some of its competitors, Bio-Rad Laboratories has garnered significant attention from analysts. With its dedication to excellence and innovation, Bio-Rad Laboratories continues to impress both investors and industry experts.
It's worth noting that the source of this information is FactSet.
Zoetis - A Standout Performer
Zoetis has proven to be a standout performer in the stock market. With an impressive growth rate of over 20% this year, the company has caught the attention of investors and analysts alike. One significant factor contributing to Zoetis' success is its introduction of Librela. This new pain medicine for dogs has generated anticipation and enthusiasm among experts. Analyst Brandon Vazquez from William Blair expresses his belief that the launch of Librela will propel Zoetis to achieve double-digit EPS growth while maintaining its positive momentum.
According to FactSet, Zoetis stock currently trades at just over 30 times the expected per-share earnings for the next 12 months.
Bio-Rad Laboratories - An Analyst Darling
Although Bio-Rad Laboratories may not enjoy the same level of recognition as Zoetis, it holds tremendous potential within the market. Despite experiencing a decline of 12.5% this year, Bio-Rad Laboratories is highly regarded by analysts. Four out of the five analysts who cover the company, as tracked by FactSet, have given it a Buy rating. This reflects their confidence in its future prospects.
Bio-Techne - Highly Recommended by Experts
Bio-Techne has also gained favor among analysts who cover the company. With eleven out of thirteen analysts tracked by FactSet giving it a Buy rating, Bio-Techne's potential as an investment becomes evident.
In conclusion, while some stocks may steal the spotlight, others possess impressive qualities that make them worthy of consideration. DexCom, Bio-Techne, and Bio-Rad Laboratories are prime examples of stocks in the life sciences industry that have caught the attention of investors and analysts. As they continue to innovate and grow, these companies represent exciting opportunities for those looking to diversify their portfolios within this sector.