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Should You Make a Bet on the Healthcare Stocks?

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Welcome to Episode #78 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Kevin Cook, Zacks Senior Strategist and the editor of the newly launched newsletter service the Healthcare Innovators.

Healthcare stocks have gotten a bad rap over the last few years as the biotech rally faltered and on worries about drug pricing and the repeal of Obamacare.

But healthcare covers many industries. Zacks includes 800 stocks in its medical sector including those involved in devices, eye care, dentistry, staffing, rehabilitation, information systems and nursing homes.

While there have been disruptive technologies in tech, social media and even in retail, few are paying any attention to the possibilities in healthcare. That means there is an opening for investors.

Uncovering the Hidden Gems in Healthcare

Some companies get a lot of publicity for their medical breakthroughs, and rightly so. But there are a group of smaller companies that are creating devices and therapies that are enhancing patient lives that you might never have even heard of.

Tracey recently stumbled across two of those:

1.       While doing a Hidden Gem video, she ran across BioTelemetry (BEAT) which makes wireless cardiac monitoring devices. It’s expected to see double digit earnings growth in 2017 and 2018.

2.       She came across Insulet (PODD - Free Report) , the maker of insulin management systems, after insiders bought shares. Tracey held it in her Insider Trader portfolio for several months. It’s not yet profitable, but it’s also expected to see double digit earnings growth the next 2 years.

Immuno-oncology Could Be Huge

An area that Kevin is watching closely, as is the rest of the world, is immune-oncology. This is a technique of using the body’s own immune system to fight cancer.

Several companies are involved in this hot area including Incyte (INCY - Free Report) , Merck and Bristol-Myers Squibb.

There are several Phase III trials ongoing which is the critical juncture for these treatments. (Fingers crossed.)

What Other Companies Are Pushing the Envelope?

1.       Intuitive Surgical (ISRG - Free Report) is looking to break out to new highs again. It makes robotic surgical systems. The stock isn’t cheap. It trades with a forward P/E of 38 but you’re buying it for the growth story.

2.       Edwards Lifesciences (EW - Free Report) is a leading manufacturer of heart valves. Shares are trading at 28x but earnings are expected to grow in the double digits in 2017 and 2018.

3.       Neurocrine Biosciences (NBIX - Free Report) researches drugs for neurological and endocrine disorders. It’s been in the news lately because the FDA approved its first drug for movement disorder tardive dyskinesia, or TD.

There are a lot of opportunities in the healthcare stocks.

How do you narrow down the choices?

Kevin discusses his methods for picking stocks, starting with the Zacks Rank, and how he will pick the 20 or so companies that will make up his Healthcare Innovators portfolio.

What other exciting breakthroughs could be on the way in healthcare and how can you invest in it?

Find out the answer to this and more on this week’s podcast.

Interested in Healthcare Innovators?

Zacks new service, Healthcare Innovators, is launching this week.

Kevin Cook will be exploring the entire world of healthcare in this long-term portfolio.

Click here to see more.>>