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3 Resilient Medical Stocks to Watch as Rate Hikes Continue
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The pandemic, coupled with the Ukraine-Russia war, has fueled raw material prices significantly leading to spiraling inflation across the globe. Central banks across different countries, including the United States, are increasing interest rates to tame inflation. Although a rising interest regime hurts business growth, there are few companies that can give returns even in these hard times.
The pandemic has not only taken a significant number of lives and left millions at risk of respiratory disorders over the long term but it has also hurt businesses across all verticals. The lockdowns have delayed shipments and created supply shortages — leading to higher costs.
The Fed has raised interest rates by 75 basis points (bps) thrice this year. The Fed kept a hawkish tone in its last meeting convened in August. The central bank is likely to hike rates once again in its next meeting scheduled in November. Several economists expect the Fed rate to be 4.25%-4.50% by the year-end, per a Reuters article. The article also stated that the inflation rate is more than four times the Fed’s target of 2% and the central authority may take any step to reach the target — including the risk of a near-term recession and a larger increase in the unemployment rate.
A risk of recession is currently being factored in stock markets as evident from the fact that the S&P 500 was down more than 24% till Sep 28 from December 2021-end. Many stocks have plunged more than that in the same time period.
Image Source: Zacks Investment Research
However, there are a few stocks that have sailed smoothly through the macro headwinds, creating wealth for their investors. These stocks are likely to continue their uptrend amid gloomy economic conditions.
Medical Stocks in Focus
TransMedics Group (TMDX - Free Report) has developed the Organ Care System to disrupt the decades-old standard of care for organ transplant therapy for end-stage organ failure patients across multiple disease states. TMDX’s technology represents a paradigm shift that transforms organ preservation for transplantation from a static state to a dynamic environment that enables new capabilities, including organ optimization and assessment. Its disruptive technology attracted investors who pushed stock prices of TransMedics Group up by 122% till Sep 28 from December 2021-end. The company has ample scope for growth that will support the uptrend in its stocks going forward.
PROCEPT BioRobotics (PRCT - Free Report) is a surgical robotics company focused on advancing patient care by developing transformative solutions in urology. The robotic surgery field is anticipated to see major growth as healthcare adopts robots for precise treatment. Robotic surgery is also providing options for minimally-invasive surgeries for cases where it was not possible earlier. These factors are likely to drive demand for robotic surgery products, creating an opportunity for PROCEPT BioRobotics to fuel its growth. Shares of PRCT gained more than 65% till Sep 28 from December 2021-end amid recession blues.
Sensus Healthcare (SRTS - Free Report) is engaged in the manufacturing of radiation therapy devices. It provides highly effective, non-invasive, and cost-effective treatments for both oncological and non-oncological skin conditions. The increasing number of oncology patients represents a robust market for SRTS’ products. Strong demand for its products helped Sensus Healthcare to drive its top line 164% higher year over year during the first six months of 2022. The demand is likely to continue, boosting the top line further. Shares of Sensus Healthcare gained 70% till Sep 28 from December 2021-end.
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3 Resilient Medical Stocks to Watch as Rate Hikes Continue
The pandemic, coupled with the Ukraine-Russia war, has fueled raw material prices significantly leading to spiraling inflation across the globe. Central banks across different countries, including the United States, are increasing interest rates to tame inflation. Although a rising interest regime hurts business growth, there are few companies that can give returns even in these hard times.
The pandemic has not only taken a significant number of lives and left millions at risk of respiratory disorders over the long term but it has also hurt businesses across all verticals. The lockdowns have delayed shipments and created supply shortages — leading to higher costs.
The Fed has raised interest rates by 75 basis points (bps) thrice this year. The Fed kept a hawkish tone in its last meeting convened in August. The central bank is likely to hike rates once again in its next meeting scheduled in November. Several economists expect the Fed rate to be 4.25%-4.50% by the year-end, per a Reuters article. The article also stated that the inflation rate is more than four times the Fed’s target of 2% and the central authority may take any step to reach the target — including the risk of a near-term recession and a larger increase in the unemployment rate.
A risk of recession is currently being factored in stock markets as evident from the fact that the S&P 500 was down more than 24% till Sep 28 from December 2021-end. Many stocks have plunged more than that in the same time period.
Image Source: Zacks Investment Research
However, there are a few stocks that have sailed smoothly through the macro headwinds, creating wealth for their investors. These stocks are likely to continue their uptrend amid gloomy economic conditions.
Medical Stocks in Focus
TransMedics Group (TMDX - Free Report) has developed the Organ Care System to disrupt the decades-old standard of care for organ transplant therapy for end-stage organ failure patients across multiple disease states. TMDX’s technology represents a paradigm shift that transforms organ preservation for transplantation from a static state to a dynamic environment that enables new capabilities, including organ optimization and assessment. Its disruptive technology attracted investors who pushed stock prices of TransMedics Group up by 122% till Sep 28 from December 2021-end. The company has ample scope for growth that will support the uptrend in its stocks going forward.
PROCEPT BioRobotics (PRCT - Free Report) is a surgical robotics company focused on advancing patient care by developing transformative solutions in urology. The robotic surgery field is anticipated to see major growth as healthcare adopts robots for precise treatment. Robotic surgery is also providing options for minimally-invasive surgeries for cases where it was not possible earlier. These factors are likely to drive demand for robotic surgery products, creating an opportunity for PROCEPT BioRobotics to fuel its growth. Shares of PRCT gained more than 65% till Sep 28 from December 2021-end amid recession blues.
Sensus Healthcare (SRTS - Free Report) is engaged in the manufacturing of radiation therapy devices. It provides highly effective, non-invasive, and cost-effective treatments for both oncological and non-oncological skin conditions. The increasing number of oncology patients represents a robust market for SRTS’ products. Strong demand for its products helped Sensus Healthcare to drive its top line 164% higher year over year during the first six months of 2022. The demand is likely to continue, boosting the top line further. Shares of Sensus Healthcare gained 70% till Sep 28 from December 2021-end.