Back to top

Image: Bigstock

These Medical ETFs & Stocks Deserve a Salute on Health Day

Read MoreHide Full Article

This World Health Day gives us an opportunity to pay tribute to medical companies for their relentless efforts to fight COVID-19. Many say, the last time the world has seen such severity of a pandemic was in 1918, when the Spanish flu had emerged.

The novel coronavirus — that is said to have originated in China — has now infected more than 1,345,000 people, with the death toll being about 74,767. Researchers and scientists are striving to come upwith treatment and vaccines, putting the spotlight on some specific biotech and healthcare companies. 

While the global stock markets took a beating this year and economies are in dismal conditions, thanks to widespread lockdowns, stocks of medical companies that are into the testing and making of kits, drugs and vaccines to fight COVID-19 gained immensely this year.

Co-Diagnostics Inc. CODX (up 1,051.9% YTD), VAXART Inc. VXRT (up 391.4%), Vir Biotechnology VIR (up 130.6%), Moderna (MRNA - Free Report) (up 77.1%) and Aytu Bioscience Inc. AYTU (up 67%) are some of the blockbuster winners of the year.  Notably, Large Cap Pharmaceuticals stocks have lost 9.5% so far this year versus the 22.5% decline in the S&P 500 while biotech was off only 8.5%.

Upbeat Zacks Sector & Industry Rank

The medical sector currently has a Zacks Rank #1 among the 16 broad Zacks sectors. There is a total of 896 stocks in the sector spread across 13 medical industries. Each of the industry has a favorable Zacks Rank with the furthest one —Medical services —placed at the top 40% of total 250+ industries in the Zacks universe. And the top-most one —Nursing Homes — falls into top 1%. The all-important Drugs, Large Cap Pharmaceuticals and Biomedical and Genetics have Zacks industry rank within the top 9%, 14% and 11%, respectively.

Source: Zacks.com

Researches on Medicines & Vaccines at ‘Incredible Speed’

More than 140 experimental drug treatments and vaccines for COVID-19 are in the development phase globally, mostly in early stages, per Informa Pharma Intelligence, as quoted on Wall Street journal. Though no concrete solution is not in sight yet, but researches are going on at a record speed.

The first potential vaccine from the manufacturer Moderna was injected into people on Mar 16. Johnson & Johnson (JNJ - Free Report) announced the selection of a lead COVID-19 vaccine candidate on Mar 30. Pfizer Inc. (PFE - Free Report) too informed about its plans to support the development and distribution of BioNTech SE’s BNTX COVID-19 vaccine candidate.

Gilead Sciences’ (GILD - Free Report) remdesivir has been raising hopes as a potential treatment. Thanks to a stepped-up production schedule, Gilead plans to donate 1.5 million doses of remdesivir to ongoing clinical trials. Vir Biotechnologysigned a letter of intent with biotech bigwig Biogen Inc. (BIIB - Free Report) for the clinical manufacturing of human monoclonal antibodies to develop the potential treatment of COVID-19.

Then there is Sanofi (SNY - Free Report) , which in collaboration with BARDA, is working to test a preclinical vaccine candidate using its recombinant DNA platform (read: Biotech Stocks & ETFs to Gain on Progress in COVID-19 Vaccine Development).

Test Kits in High Demand

With the virus spreading rapidly, demand for test kits is sky-high. The likes of Abbott (ABT - Free Report) , Hologic (HOLX - Free Report) , Thermo Fisher (TMO - Free Report) , QIAGEN N.V. (QGEN - Free Report) and Aytu Bioscience Inc. AYTU have been hitting the headlines in this field (read: Healthcare Stocks & ETFs to Gain on Coronavirus Test Progress).

Q1 Earnings Growth Picture Positive for Medical

Despite the lackluster earnings growth projections for most sectors, healthcare stood out. It is now among the very few sectors which are likely to record earnings growth (up 2%) in first-quarter 2020, per Earnings Trends issued on Apr 1. Overall, the S&P 500 earnings are likely to decline 6.6% in the quarter.

ETFs in Focus

Against this backdrop, we highlight a few healthcare ETFs that have breezed past the S&P 500 (down 16.3%) in the past month.

VanEck Vectors Biotech ETF (BBH - Free Report) — down 2.6%

iShares Evolved U.S. Innovative Healthcare ETF IEIH — down 4.4%

Invesco Dynamic Pharmaceuticals ETF PJP — down 5.0%

iShares Nasdaq Biotechnology ETF (IBB - Free Report) — down 5.4%

iShares U.S. Medical Devices ETF IHI — down 5.4%

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>