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Grab these 3 MedTech Stocks That Outperformed S&P 500 YTD
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Although 2021 is not expected to exhibit as much economic volatility as last year, it remains to be seen how the year fares in the face of new coronavirus strains that might impact lives and economies across the world.
The MedTech sector has displayed remarkable strength since the beginning of this year by exhibiting recovery and gathering steam on expectations of the economy getting back to full-fledged reopening and normalization based on the mass vaccination mission.
However, the recent news about the highly-transmissible coronavirus Delta variant has made market watchers apprehensive along with the people of the United States and healthcare professionals. Even though vaccination is in full swing, the possibility of the new strain (likely to become dominant in the next two to three weeks) can disrupt the process altogether.
Hence, we might see the MedTech space experiencing the lingering effects of the pandemic, both positive and negative, in 2021. Nonetheless, the sector showed considerable strength last year despite the pandemic-induced disruption and it would be a prudent decision to capitalize on the MedTech space. Let us delve deeper.
MedTech Space: Resilience to Continue
Diagnostic testing will continue to see high demand until the vaccines are widely distributed. Plus, the passing of the stimulus package has provided a necessary impetus to the companies involved in the diagnostic testing space, vaccine distribution and manufacturing of personal protective equipment (PPE). Companies like Abbott Laboratories (ABT - Free Report) and Becton, Dickinson and Company (BDX - Free Report) will continue to reap the benefits this year.
Digital health will continue to gain immensely on the back of last year’s momentum. This year is likely to see companies involved in telemedicine and artificial intelligence make necessary technological advancements to better serve patients.
The pandemic led to a change in business models, with companies leaning toward virtualized, remote-operated business models for medical care that, in turn, have helped them recover and attain pre-COVID-19 levels.
Unlike last year, the mergers and acquisitions (M&A) space looks promising in 2021 as companies gain footing and rebound financially from a volatile 2020.
With the increasing dependence on self-monitoring tools, the wearable devices space continues to show strength, thereby sparking optimism in investors as the space has the potential to offer bankable returns.
Elective procedures, although, are expected to remain under pressure this year. J.P. Morgan analysts projected (as published in a MedTech Dive report) that vaccination might help in driving volumes but procedure comebacks are not likely to be seen until the second half of 2021.
Top Picks
Going by the aforementioned discussion, investors can choose to invest in stocks that have shown tremendous promise despite challenging market conditions and are fundamentally strong. To narrow down the list, we have selected three stocks with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
West Pharmaceutical Services, Inc. (WST - Free Report) : It is a leading global manufacturer with respect to design and production of technologically advanced, high-quality, integrated containment and delivery systems for injectable drugs and healthcare products. The company exhibited robust performance in the first quarter of 2021 aided by solid organic sales growth in both of its base businesses and improving demand for products related to COVID-19 vaccines. The company’s high-value products (HVP) continue to drive higher gross and operating margins. Additionally, a raised 2021 outlook is encouraging. Its projected EPS growth for 2021 stands at a solid 50.4% compared with the industry’s projection of 23.8%. The stock has surged 31.7% year to date, compared with the S&P 500’s rally of 16.8%.
Image Source: Zacks Investment Research
Phibro Animal Health Corporation (PAHC - Free Report) : A leading global diversified animal health and mineral nutrition company, Phibro exited third-quarter fiscal 2021 with better-than-expected earnings results. Solid growth in the Performance Products segment driven by strong demand for copper-based products drove top-line growth. Growth in international market of dairy products amid the post-pandemic recovery is impressive. The year-over-year growth in the Mineral Nutrition arm is encouraging as well. The company has provided financial guidance for fourth-quarter fiscal 2021, calling for year-over-year revenue growth. Its projected EPS growth for 2021 stands at 16.7% compared with the industry’s projection of 14.9%. The stock has appreciated 31.5% year to date, compared with the S&P 500’s rally of 16.8%.
ResMed Inc. (RMD - Free Report) : ResMed holds a major position as designer, manufacturer, as well as a distributor in the worldwide market for generators, masks, and related accessories for the treatment of sleep-disordered breathing (SDB) and other respiratory disorders. The company exited the fiscal 2021 third quarter with better-than-expected earnings. Recovery of core patient flow, and increasing adoption of digital health solutions and other tools to aid remote care amid the pandemic, look encouraging. In the quarter, the company registered strong sales across its mask product portfolio in the United States, Canada and Latin America, which seem appreciative. Potential in digital health and strategic alliances entered into by ResMed look encouraging. Its long-term expected earnings growth rate is pegged at 13.9%. The stock has gained 18% year to date, compared with the S&P 500’s rally of 16.8%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Image: Bigstock
Grab these 3 MedTech Stocks That Outperformed S&P 500 YTD
Although 2021 is not expected to exhibit as much economic volatility as last year, it remains to be seen how the year fares in the face of new coronavirus strains that might impact lives and economies across the world.
The MedTech sector has displayed remarkable strength since the beginning of this year by exhibiting recovery and gathering steam on expectations of the economy getting back to full-fledged reopening and normalization based on the mass vaccination mission.
However, the recent news about the highly-transmissible coronavirus Delta variant has made market watchers apprehensive along with the people of the United States and healthcare professionals. Even though vaccination is in full swing, the possibility of the new strain (likely to become dominant in the next two to three weeks) can disrupt the process altogether.
Hence, we might see the MedTech space experiencing the lingering effects of the pandemic, both positive and negative, in 2021. Nonetheless, the sector showed considerable strength last year despite the pandemic-induced disruption and it would be a prudent decision to capitalize on the MedTech space. Let us delve deeper.
MedTech Space: Resilience to Continue
Diagnostic testing will continue to see high demand until the vaccines are widely distributed. Plus, the passing of the stimulus package has provided a necessary impetus to the companies involved in the diagnostic testing space, vaccine distribution and manufacturing of personal protective equipment (PPE). Companies like Abbott Laboratories (ABT - Free Report) and Becton, Dickinson and Company (BDX - Free Report) will continue to reap the benefits this year.
Digital health will continue to gain immensely on the back of last year’s momentum. This year is likely to see companies involved in telemedicine and artificial intelligence make necessary technological advancements to better serve patients.
The pandemic led to a change in business models, with companies leaning toward virtualized, remote-operated business models for medical care that, in turn, have helped them recover and attain pre-COVID-19 levels.
Unlike last year, the mergers and acquisitions (M&A) space looks promising in 2021 as companies gain footing and rebound financially from a volatile 2020.
With the increasing dependence on self-monitoring tools, the wearable devices space continues to show strength, thereby sparking optimism in investors as the space has the potential to offer bankable returns.
Elective procedures, although, are expected to remain under pressure this year. J.P. Morgan analysts projected (as published in a MedTech Dive report) that vaccination might help in driving volumes but procedure comebacks are not likely to be seen until the second half of 2021.
Top Picks
Going by the aforementioned discussion, investors can choose to invest in stocks that have shown tremendous promise despite challenging market conditions and are fundamentally strong. To narrow down the list, we have selected three stocks with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
West Pharmaceutical Services, Inc. (WST - Free Report) : It is a leading global manufacturer with respect to design and production of technologically advanced, high-quality, integrated containment and delivery systems for injectable drugs and healthcare products. The company exhibited robust performance in the first quarter of 2021 aided by solid organic sales growth in both of its base businesses and improving demand for products related to COVID-19 vaccines. The company’s high-value products (HVP) continue to drive higher gross and operating margins. Additionally, a raised 2021 outlook is encouraging. Its projected EPS growth for 2021 stands at a solid 50.4% compared with the industry’s projection of 23.8%. The stock has surged 31.7% year to date, compared with the S&P 500’s rally of 16.8%.
Phibro Animal Health Corporation (PAHC - Free Report) : A leading global diversified animal health and mineral nutrition company, Phibro exited third-quarter fiscal 2021 with better-than-expected earnings results. Solid growth in the Performance Products segment driven by strong demand for copper-based products drove top-line growth. Growth in international market of dairy products amid the post-pandemic recovery is impressive. The year-over-year growth in the Mineral Nutrition arm is encouraging as well. The company has provided financial guidance for fourth-quarter fiscal 2021, calling for year-over-year revenue growth. Its projected EPS growth for 2021 stands at 16.7% compared with the industry’s projection of 14.9%. The stock has appreciated 31.5% year to date, compared with the S&P 500’s rally of 16.8%.
ResMed Inc. (RMD - Free Report) : ResMed holds a major position as designer, manufacturer, as well as a distributor in the worldwide market for generators, masks, and related accessories for the treatment of sleep-disordered breathing (SDB) and other respiratory disorders. The company exited the fiscal 2021 third quarter with better-than-expected earnings. Recovery of core patient flow, and increasing adoption of digital health solutions and other tools to aid remote care amid the pandemic, look encouraging. In the quarter, the company registered strong sales across its mask product portfolio in the United States, Canada and Latin America, which seem appreciative. Potential in digital health and strategic alliances entered into by ResMed look encouraging. Its long-term expected earnings growth rate is pegged at 13.9%. The stock has gained 18% year to date, compared with the S&P 500’s rally of 16.8%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>