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4 Drug/Biotech Stocks to Buy Ahead of World Health Day

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Every year World Health Day is celebrated on Apr 7. The World Health Organization (“WHO”) has been organizing the event for seven decades. This year, WHO is focusing on making healthcare services accessible to everyone, with the theme “Universal health coverage: everyone, everywhere”.

Per WHO’s official website, who.int, half of the world does not have access to essential healthcare services. Moreover, rising healthcare costs are pushing as many as 100 million people into poverty. The organization wants to bring another 1 billion people under healthcare coverage globally by 2023.

In a bid to accomplish WHO’s goal, many philanthropic activities are carried out by several trusts and foundations all over the globe. Given the increase in population and incidence of diseases along with growing awareness and healthcare coverage initiatives, the drug sector is expected to grow. Consequently, companies  in the healthcare space are expected to witness higher sales in the years to come.

4 Stocks to Consider

Ahead of World Health Day 2018, we suggest four companies, which investors can add to their portfolio.

We have chosen four stocks that carry a Zacks Rank #1 (Strong Buy) or #2 (Buy), a VGM Score (V stands for Value, G for Growth and M for Momentum) of A or B, have witnessed positive current-year earnings estimate revisions over the past 90 days and with a market cap of more than one billion.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Our Picks

GlaxoSmithKline plc’s (GSK - Free Report) new products have been performing encouragingly. Meanwhile, back-to-back approvals of three new products in 2017 — Trelegy Ellipta, Shingrix and Juluca — have strengthened Glaxo’s competitive position. After underperforming the broader industry in 2017, Glaxo’s shares have picked up this year.

In the past couple of months, analysts have become bullish on the stock, with two upward estimate revisions for 2018 earnings. Glaxo’s earnings estimates increased from $2.78 to $2.94 for 2018 and from $2.87 to $3.03 for 2019 in the last 90 days. The company holds a Zacks Rank #2 and has a VGM Score of B. (Read more: 4 Reasons Why Glaxo Stock Can be a Great Pick in '18)

Amgen Inc.’s (AMGN - Free Report) newer drugs —  Prolia, Xgeva, Kyprolis — are performing well.  Amgen is also progressing with its pipeline and expects approval and launch of migraine candidate, Aimovig this year. The company’s restructuring plan is making it leaner and more cost efficient. Amgen’s shares have also outperformed the industry this year so far.

The stock has been witnessing solid activity on the estimate revision front. The Zacks Consensus Estimate for 2018 earnings trended up in the past 90 days, from $12.75 to $13.25 per share. The Zacks Consensus Estimate for 2019 increased from $13.04 to $13.83 over the same period. The company holds a Zacks Rank #2 and has a VGM Score of B.

Johnson & Johnson’s (JNJ - Free Report) sales accelerated in the second half of 2017 after a relatively softer first half, backed by higher sales in the Pharmaceutical segment and improved performance of Medical Devices. New products in all segments, label expansion of drugs like Imbruvica and Darzalex and contribution from recent acquisitions - mainly Actelion – are likely to drive top-line growth in 2018.

Analysts have great expectations from the company this year and have been revising 2018 earnings estimates upward over the past 60 days. J&J’s earnings estimates increased from $7.84 to $8.11 for 2018 and from $8.48 to $8.63 for 2019 in the last 90 days. The company holds a Zacks Rank #2 and has a VGM Score of B.

Horizon Pharma Public Limited Company’s sales guidance for 2018 is encouraging. The company’s orphan and rheumatology business units have continued to show strong growth.

Moreover, analysts have become increasingly bullish on the company in the past couple of months, with four upward estimate revisions for its 2018 earnings. Horizon Pharma’s earnings estimates increased from $1.28 to $1.43 for 2018 and from $1.51 to $1.77 for 2019 in the last 90 days. The company holds a Zacks Rank #2 and has a VGM Score of B. (Read more: Is Horizon Pharma Public a Great Stock for Value Investors Right Now?)

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