- ORIGINAL NEWS
Op-ed: Here are 6 health-care stocks to watch now, amid a bumpy recovery
- SUMMARY
Once labeled a struggling sector, the healthcare industry has made a remarkable recovery in the stock market, with its growth projected to outperform other sectors in the coming year.
Demand for healthcare services remains constant, regardless of economic conditions, making it a defensive play for investors.
The ageing population of baby boomers and their unique healthcare needs further fuel this demand.
The sector’s resurgence is driven by the broader rotation from technology stocks and the expectation of slowing economic growth, which makes defensive sectors like healthcare more attractive.
Pharmaceutical advancements, such as diabetes and weight loss drugs, and innovations in robotic technology for surgeries have also contributed to investor interest.
Despite the promising outlook, valuations of some healthcare stocks may be stretched, like Eli Lilly and Intuitive Surgical.
However, there are numerous undervalued companies across subsectors offering good earnings and growth prospects.
Six recommended stocks with solid fundamentals, low risk, and strong growth projections include Abbvie, Vertex Pharmaceuticals, Stryker Corp., Medpace Holdings, Iqvia Holdings, and Cencora.
Election years generally favor the overall market, but healthcare stocks can be vulnerable to political rhetoric aimed at reducing consumer costs.
However, dips caused by such rhetoric may present buying opportunities for long-term investors aiming to capitalize on the sector’s expected gains in 2025.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“Health care, long an ailing stock market sector, has recovered over the past six months.”
“Several analysts are projecting strong performance for this year.”
Negative
“Health care was basically flat in 2022 and again for most of 2023, a year when its overall performance was the third-worst among the market’s 11 sectors and the S&P 500 grew 26%.”
“Late in 2023 and in the first quarter of 2024, health-care stocks turned around, advancing about 5%, about half of the gain of the S&P 500. In mid-April, as the S&P 500 pulled back, the health-care sector gave up its first-quarter gains.”