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3 Medical Stocks to Buy in 2022 for Long-Term Resilience
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There has been a downtrend in the broader market index, S&P 500, in the past year as a result of a steep decline in major sectors, including financial, technology and medical. Fears of a resurgence of COVID-19 cases and the risk of a potential recession resulted in a decline in the majority of stocks. The downturn in stocks has made it difficult for growth investors as valuations of high-flying stocks have crashed significantly in the past year.
However, the downturn has created opportunities for investments to drive long-term wealth creation. Investors can focus on companies with strong fundamentals and witnessing continued demand for their products and services amid macro headwinds as these could be the potential winners over the long term. The downtrend in stocks has also made some of these companies’ valuations attractive. Please note that the stock market is unlikely to continue its downtrend for a long period and should return to an uptrend over a longer time frame.
Medical is one of the sectors that has been historically resilient amid recessionary headwinds as demand for medical services remains no matter what. Moreover, rising cases of different diseases, especially cancer and diabetes, create strong growth prospects for companies targeting these markets. Meanwhile, companies focused on treating rare diseases also hold the potential for robust growth due to less competition and higher margins.
Here we discuss three companies from the Zacks – Medical sector that have a history of strong financial growth and with potential to generate wealth for investors over the next three to five years on the back of unique competitive advantages within their respective industries.
Vertex has created a niche for itself by developing multiple popular and effective treatment options for patients with cystic fibrosis (CF). There are four CFTR modulator therapies available for treating CF patients — all developed and marketed by Vertex. These make it a clear leader in the field with no competition so far. The company’s newest and current flagship drug — Trikafta — raked in $3.65 billion in the first half of 2022, reflecting growth of nearly 50% year over year.
Vertex’s strong product portfolio has made it resilient amid the recent downtrend in global stock markets. The company’s stock has gained 59.5% in the past year while the Medical sector declined 23.3% and the S&P 500 was down 20.2% in the same time frame. A stock that has yielded positive returns during a downtrend is most likely to exhibit more strength when markets start to recover. Vertex is thus likely to witness strong growth over the next five years.
While Vertex’s main focus is on the development and strengthening of its CF franchise, the company also has a rapidly advancing mid- to late-stage pipeline in additional diseases beyond CF like acute pain, sickle cell disease, beta-thalassemia, APOL1-mediated kidney diseases and cell therapy for type I diabetes. Many of these candidates represent multibillion-dollar opportunities. Programs in five disease areas are now entering or progressing through late-stage clinical development.
Vertex currently has a Zacks Rank #2 (Buy). The company’s earnings are expected to grow 11.2% over the next five years.
Intuitive Surgical is a leader in the field of developing and manufacturing robotic surgical systems, paving the way for minimal-invasive surgeries across the globe. The company’s array of surgical products, especially the da Vinci system, used in everything from colorectal procedures to cardiac surgery, and the Ion system, used for minimally invasive peripheral lung biopsies, has been driving top-line growth for the company over the past decade. With strong adoption of robotic surgeries in key markets like the United States, Europe, Japan and China, Intuitive Surgical’s top-line growth seems to be secured for another decade.
The robotic-assisted surgery market is expected to reach a valuation of $18.2 billion by 2030 from $4.4 billion in 2022. Intuitive Surgical is likely to gain the most from the growth in this space due to its leadership position. Although several new players are entering the market, ISRG currently serves nearly 80% of the market.
However, the recent downturn in global stock markets had a significant impact on Intuitive Surgical’s share price. The company’s shares have plunged 43.7% in the past year amid COVID-related headwinds. The pandemic affected global supplies of semiconductors and other materials utilized in Intuitive Surgical’s products. Although the company is making efforts to secure the supply required to ensure the fulfillment of consumer demand, global shortages might lead to higher production costs or delay in production. Moreover, recent recession fears may keep the stock prices of this company near their lows.
However, economies will eventually recover from the recession in the coming years, which will fuel demand. Intuitive Surgical is most likely to ride on an uptrend in global stock markets with its strong and innovative product portfolio as well as its global footprint. Moreover, the recent decline in its share price has made the company’s valuation attractive.
Intuitive Surgical currently has a Zacks Rank of 2. The company’s earnings are expected to grow 9.5% over the next five years.
AMN Healthcare recruits and places nurses, physicians, and other healthcare professionals in travel or permanent assignments in acute-care facilities, physician practice groups, and other healthcare facilities. Per AMN Healthcare, increased healthcare utilization and a tight labor market have led to record-high demand in several areas of the company’s business. These, in turn, bode well for AMN Healthcare’s collaborations and innovations, which are intended to provide greater access to patient care, thus fueling further confidence.
AMN Healthcare has lately been strengthening its inorganic portfolio through a string of acquisitions. In May 2022, AMN Healthcare acquired Connetics USA, which expanded its international nurse business beyond contract staffing.
Shares of AMN have been resilient amid several macro headwinds, gaining 9.9% in the past year, on the back of better-than-expected financial results in the second quarter of 2022. All three of AMN Healthcare’s reportable segments witnessed robust performances in the second quarter of 2022.
AMN Healthcare’s business has gradually evolved beyond traditional healthcare staffing. The company has become a strategic total talent solution partner with its clients. It has expanded its portfolio to serve a diverse and growing set of healthcare talent-related needs. The company enables clients to build and optimize their healthcare talent to deliver great patient outcomes and experience. Further, the company has also displayed strength in digital health capabilities with its AMN Passport and AMN Cares. These products reflect long-term opportunity for the company in a growing market.
AMN currently has a Zacks Rank of 2. The company’s earnings are expected to grow 8.3% over the next five years.
Image: Bigstock
3 Medical Stocks to Buy in 2022 for Long-Term Resilience
There has been a downtrend in the broader market index, S&P 500, in the past year as a result of a steep decline in major sectors, including financial, technology and medical. Fears of a resurgence of COVID-19 cases and the risk of a potential recession resulted in a decline in the majority of stocks. The downturn in stocks has made it difficult for growth investors as valuations of high-flying stocks have crashed significantly in the past year.
However, the downturn has created opportunities for investments to drive long-term wealth creation. Investors can focus on companies with strong fundamentals and witnessing continued demand for their products and services amid macro headwinds as these could be the potential winners over the long term. The downtrend in stocks has also made some of these companies’ valuations attractive. Please note that the stock market is unlikely to continue its downtrend for a long period and should return to an uptrend over a longer time frame.
Medical is one of the sectors that has been historically resilient amid recessionary headwinds as demand for medical services remains no matter what. Moreover, rising cases of different diseases, especially cancer and diabetes, create strong growth prospects for companies targeting these markets. Meanwhile, companies focused on treating rare diseases also hold the potential for robust growth due to less competition and higher margins.
Here we discuss three companies from the Zacks – Medical sector that have a history of strong financial growth and with potential to generate wealth for investors over the next three to five years on the back of unique competitive advantages within their respective industries.
Image Source: Zacks Investment Research
Vertex Pharmaceuticals (VRTX - Free Report)
Vertex has created a niche for itself by developing multiple popular and effective treatment options for patients with cystic fibrosis (CF). There are four CFTR modulator therapies available for treating CF patients — all developed and marketed by Vertex. These make it a clear leader in the field with no competition so far. The company’s newest and current flagship drug — Trikafta — raked in $3.65 billion in the first half of 2022, reflecting growth of nearly 50% year over year.
Vertex’s strong product portfolio has made it resilient amid the recent downtrend in global stock markets. The company’s stock has gained 59.5% in the past year while the Medical sector declined 23.3% and the S&P 500 was down 20.2% in the same time frame. A stock that has yielded positive returns during a downtrend is most likely to exhibit more strength when markets start to recover. Vertex is thus likely to witness strong growth over the next five years.
While Vertex’s main focus is on the development and strengthening of its CF franchise, the company also has a rapidly advancing mid- to late-stage pipeline in additional diseases beyond CF like acute pain, sickle cell disease, beta-thalassemia, APOL1-mediated kidney diseases and cell therapy for type I diabetes. Many of these candidates represent multibillion-dollar opportunities. Programs in five disease areas are now entering or progressing through late-stage clinical development.
Vertex currently has a Zacks Rank #2 (Buy). The company’s earnings are expected to grow 11.2% over the next five years.
Vertex Pharmaceuticals Incorporated Price
Vertex Pharmaceuticals Incorporated price | Vertex Pharmaceuticals Incorporated Quote
Intuitive Surgical (ISRG - Free Report)
Intuitive Surgical is a leader in the field of developing and manufacturing robotic surgical systems, paving the way for minimal-invasive surgeries across the globe. The company’s array of surgical products, especially the da Vinci system, used in everything from colorectal procedures to cardiac surgery, and the Ion system, used for minimally invasive peripheral lung biopsies, has been driving top-line growth for the company over the past decade. With strong adoption of robotic surgeries in key markets like the United States, Europe, Japan and China, Intuitive Surgical’s top-line growth seems to be secured for another decade.
The robotic-assisted surgery market is expected to reach a valuation of $18.2 billion by 2030 from $4.4 billion in 2022. Intuitive Surgical is likely to gain the most from the growth in this space due to its leadership position. Although several new players are entering the market, ISRG currently serves nearly 80% of the market.
However, the recent downturn in global stock markets had a significant impact on Intuitive Surgical’s share price. The company’s shares have plunged 43.7% in the past year amid COVID-related headwinds. The pandemic affected global supplies of semiconductors and other materials utilized in Intuitive Surgical’s products. Although the company is making efforts to secure the supply required to ensure the fulfillment of consumer demand, global shortages might lead to higher production costs or delay in production. Moreover, recent recession fears may keep the stock prices of this company near their lows.
However, economies will eventually recover from the recession in the coming years, which will fuel demand. Intuitive Surgical is most likely to ride on an uptrend in global stock markets with its strong and innovative product portfolio as well as its global footprint. Moreover, the recent decline in its share price has made the company’s valuation attractive.
Intuitive Surgical currently has a Zacks Rank of 2. The company’s earnings are expected to grow 9.5% over the next five years.
Intuitive Surgical, Inc. Price
Intuitive Surgical, Inc. price | Intuitive Surgical, Inc. Quote
AMN Healthcare Services (AMN - Free Report)
AMN Healthcare recruits and places nurses, physicians, and other healthcare professionals in travel or permanent assignments in acute-care facilities, physician practice groups, and other healthcare facilities. Per AMN Healthcare, increased healthcare utilization and a tight labor market have led to record-high demand in several areas of the company’s business. These, in turn, bode well for AMN Healthcare’s collaborations and innovations, which are intended to provide greater access to patient care, thus fueling further confidence.
AMN Healthcare has lately been strengthening its inorganic portfolio through a string of acquisitions. In May 2022, AMN Healthcare acquired Connetics USA, which expanded its international nurse business beyond contract staffing.
Shares of AMN have been resilient amid several macro headwinds, gaining 9.9% in the past year, on the back of better-than-expected financial results in the second quarter of 2022. All three of AMN Healthcare’s reportable segments witnessed robust performances in the second quarter of 2022.
AMN Healthcare’s business has gradually evolved beyond traditional healthcare staffing. The company has become a strategic total talent solution partner with its clients. It has expanded its portfolio to serve a diverse and growing set of healthcare talent-related needs. The company enables clients to build and optimize their healthcare talent to deliver great patient outcomes and experience. Further, the company has also displayed strength in digital health capabilities with its AMN Passport and AMN Cares. These products reflect long-term opportunity for the company in a growing market.
AMN currently has a Zacks Rank of 2. The company’s earnings are expected to grow 8.3% over the next five years.
AMN Healthcare Services Inc Price
AMN Healthcare Services Inc price | AMN Healthcare Services Inc Quote