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MedTech to Gain From Economic Stimulus Bill: 3 Stocks to Buy
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The dark pall cast by the COVID-19 pandemic, last year, on the people and global economy still continues to linger. In fact, with resurgence in cases and several countries reinstating lockdowns to curb the spread, the nightmare is far from over.
However, the latest $1.9 trillion stimulus package (signed by the President on Mar 12), known as the America Rescue Plan, is a beacon of hope amid the uncertainty. In fact, the passing of this stimulus package led to economists upgrading their US growth forecasts. According to multiple sources, Morgan Stanley has projected 2021 US GDP growth of 7.3%, while Goldman Sachs is going for 6.9% (the fastest since 1984). This means that US GDP growth could rival or even exceed that of China.
In comparison to most of the sectors, the MedTech showed resilience last year amid the pandemic-led disruption. The stimulus bill is likely to have far-reaching implications when it comes to this sector, thereby making it an alluring investment prospect.
Stimulus Package in Brief
The stimulus package (one of the largest economic packages in U.S. history) was passed with the objective of boosting the economy and putting an end to the pandemic. In addition to an extension of unemployment benefits, another round of housing assistance, aid to state and local governments, the package includes $160 billion for vaccine and testing programs.
Further, the plan comprises funding for building community vaccination centers and assigning mobile units in remote areas. The package will also support testing efforts, which include purchase of rapid-result tests, expansion of laboratory capacity and aid local jurisdictions to implement testing regimens.
MedTech to Reap Benefits of the Stimulus Bill
With the passing of this stimulus package, the companies involved in the testing space, vaccine distribution and manufacturing of personal protective equipment (PPE) will get a significant boost.
For instance, Becton, Dickinson and Company (BDX - Free Report) , which has been at the forefront of the fight against this public health crisis, stands to benefit immensely from this package as the company will be able to bolster its testing capabilities further.
Apart from boosting testing and laboratory capacity, the plan will also help in addressing supply chain issues and enhance reporting and collection of data, which in turn will aid in enhancing the public health response further. Hence, the stimulus package will be crucial in meeting a key concern that most companies in the MedTech space were facing — more production and better distribution.
In this regard, Cardinal Health (CAH - Free Report) , which has implemented its supply assurance program to offer long-term sustained supply of its key product categories (mask, gowns, gloves), will get an additional boost from the America Rescue Plan.
3 Potential MedTech Gainers
Given the aforementioned discussion, investors might want to take a look at the following stocks that have showed tremendous prowess during the pandemic and stand to benefit from this stimulus package.
Abbott Laboratories (ABT - Free Report) has been taking significant strides in the wake of the coronavirus outbreak. The company has developed and launched several COVID-19 tests across its testing platform for both laboratory and rapid point-of-care settings. In March, the company launched two COVID-19 tests — the ID NOW COVID-19 molecular test (the fastest available molecular point-of-care test delivering results within 13 minutes and positive results in five minutes) and the RealTime SARS-CoV-2 molecular test, which runs on Abbott's m2000 RealTime System located in hospitals and reference laboratories. In addition to molecular testing during this period, the company also anticipated increased demand for other types of tests, including both antigen and antibody.
In the past year, the stock has gained 55.7% compared with the industry’s growth of 31.6%.
Hologic, Inc. (HOLX - Free Report) , a renowned diagnostics player, exhibited continued growth in the core molecular diagnostics sub-segment, which accounted for 88.2% of total Diagnostics revenues in the fiscal first quarter of 2021. Molecular Diagnostics sales increased a whopping 448.7% at constant exchange rate or CER. Global revenues for molecular diagnostics increased 779.8%. This encouraging performance buoys optimism in the stock.
Over the past year, the stock has soared 111.6% compared with the industry’s rally of 39.2%.
Bio-Rad Laboratories, Inc. (BIO - Free Report) exited the fourth quarter of 2020 with better-than-expected results. The company witnessed solid bottom-line growth in the quarter. The uptick in polymerase chain reaction (PCR), Droplet Digital PCR (ddPCR) and Process Media product revenues resulted from robust demand due to COVID-19 testing and related research. Bio-Rad, during its earnings call in February this year, confirmed the receipt of FDA’s emergency use authorization (EUA) for its COVID RT-PCR assay kit last month, which runs on the company’s existing CFX PCR platforms as well as on qPCR systems from other providers.
In the past year, the stock has appreciated 64.1% compared with the industry’s growth of 31.7%.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
MedTech to Gain From Economic Stimulus Bill: 3 Stocks to Buy
The dark pall cast by the COVID-19 pandemic, last year, on the people and global economy still continues to linger. In fact, with resurgence in cases and several countries reinstating lockdowns to curb the spread, the nightmare is far from over.
However, the latest $1.9 trillion stimulus package (signed by the President on Mar 12), known as the America Rescue Plan, is a beacon of hope amid the uncertainty. In fact, the passing of this stimulus package led to economists upgrading their US growth forecasts. According to multiple sources, Morgan Stanley has projected 2021 US GDP growth of 7.3%, while Goldman Sachs is going for 6.9% (the fastest since 1984). This means that US GDP growth could rival or even exceed that of China.
In comparison to most of the sectors, the MedTech showed resilience last year amid the pandemic-led disruption. The stimulus bill is likely to have far-reaching implications when it comes to this sector, thereby making it an alluring investment prospect.
Stimulus Package in Brief
The stimulus package (one of the largest economic packages in U.S. history) was passed with the objective of boosting the economy and putting an end to the pandemic. In addition to an extension of unemployment benefits, another round of housing assistance, aid to state and local governments, the package includes $160 billion for vaccine and testing programs.
Further, the plan comprises funding for building community vaccination centers and assigning mobile units in remote areas. The package will also support testing efforts, which include purchase of rapid-result tests, expansion of laboratory capacity and aid local jurisdictions to implement testing regimens.
MedTech to Reap Benefits of the Stimulus Bill
With the passing of this stimulus package, the companies involved in the testing space, vaccine distribution and manufacturing of personal protective equipment (PPE) will get a significant boost.
For instance, Becton, Dickinson and Company (BDX - Free Report) , which has been at the forefront of the fight against this public health crisis, stands to benefit immensely from this package as the company will be able to bolster its testing capabilities further.
Apart from boosting testing and laboratory capacity, the plan will also help in addressing supply chain issues and enhance reporting and collection of data, which in turn will aid in enhancing the public health response further. Hence, the stimulus package will be crucial in meeting a key concern that most companies in the MedTech space were facing — more production and better distribution.
In this regard, Cardinal Health (CAH - Free Report) , which has implemented its supply assurance program to offer long-term sustained supply of its key product categories (mask, gowns, gloves), will get an additional boost from the America Rescue Plan.
3 Potential MedTech Gainers
Given the aforementioned discussion, investors might want to take a look at the following stocks that have showed tremendous prowess during the pandemic and stand to benefit from this stimulus package.
These stocks, with strong growth potential, currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott Laboratories (ABT - Free Report) has been taking significant strides in the wake of the coronavirus outbreak. The company has developed and launched several COVID-19 tests across its testing platform for both laboratory and rapid point-of-care settings. In March, the company launched two COVID-19 tests — the ID NOW COVID-19 molecular test (the fastest available molecular point-of-care test delivering results within 13 minutes and positive results in five minutes) and the RealTime SARS-CoV-2 molecular test, which runs on Abbott's m2000 RealTime System located in hospitals and reference laboratories. In addition to molecular testing during this period, the company also anticipated increased demand for other types of tests, including both antigen and antibody.
In the past year, the stock has gained 55.7% compared with the industry’s growth of 31.6%.
Hologic, Inc. (HOLX - Free Report) , a renowned diagnostics player, exhibited continued growth in the core molecular diagnostics sub-segment, which accounted for 88.2% of total Diagnostics revenues in the fiscal first quarter of 2021. Molecular Diagnostics sales increased a whopping 448.7% at constant exchange rate or CER. Global revenues for molecular diagnostics increased 779.8%. This encouraging performance buoys optimism in the stock.
Over the past year, the stock has soared 111.6% compared with the industry’s rally of 39.2%.
Bio-Rad Laboratories, Inc. (BIO - Free Report) exited the fourth quarter of 2020 with better-than-expected results. The company witnessed solid bottom-line growth in the quarter. The uptick in polymerase chain reaction (PCR), Droplet Digital PCR (ddPCR) and Process Media product revenues resulted from robust demand due to COVID-19 testing and related research. Bio-Rad, during its earnings call in February this year, confirmed the receipt of FDA’s emergency use authorization (EUA) for its COVID RT-PCR assay kit last month, which runs on the company’s existing CFX PCR platforms as well as on qPCR systems from other providers.
In the past year, the stock has appreciated 64.1% compared with the industry’s growth of 31.7%.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>