Are you looking for medical stocks which hedge funds are currently buying? Look no further than this post. Medical and healthcare industry has been tagged as one of the biggest industries globally. Well, analysts and experts have all the reasons to give this tag to this booming industry. Reasons? There are “n” number of reasons.
Medical industry ensures steady and continuous demand for products and services mainly because of the simple fact that human beings are nothing but biological creatures. This makes some of the leading medical and hospital stocks the biggest globally.
Why should you invest in medical stocks which hedge funds are buying right now?
This is because these stocks tend to have potential to capitalize on trends which might appear out of nowhere. We all saw what coronavirus pandemic did to the global economy. And if it weren’t for these stocks, we wouldn’t have been to recover.
Retail investors now know the importance of medical and healthcare stocks and, thus, they continue to track and analyse the medical stocks which hedge funds are buying. Involvement of hedge funds provides them surety as these funds conduct rigorous due diligence before putting their money.
Medical stocks such as Pfizer and Moderna, Inc. have seen phenomenal growth over past few years. Pfizer Inc. touched the low of $27.48 in March 2020 and it touched the high of $59.48 in December 2021. Similarly, Moderna Inc touched $30.05 in March 2020 and, later on, it went on to trade at $449.38 by September 2021.
This data suggests that even small amount of investments made at the right time has the potential to deliver juicy profits for the investors.
Not only the stocks, but the overall industry should see growth in the US. Experts believe that US national healthcare expenditure touched ~$4.3 trillion in 2021, equating to ~$12,914 per person. As per the estimates from the Centers for Medicare and Medicaid Services, this should touch ~$6.2 trillion by 2028. Therefore, medical stocks which hedge funds are buying are the ones which are stable and which have strong and healthy balance sheets.
With this in mind, let us now have a look at top medical stocks which hedge funds are buying right now!
1. Boston Scientific Corporation
Boston Scientific Corporation is engaged in producing less invasive medical devices which are inserted into human body with the help of small openings or cuts.
The company saw its net sales touching $3.725 billion during 4Q23, exhibiting a rise of 14.9% on reported basis, 14.5% on operational basis and 13.6% on organic basis. All these comparisons are made to the prior-year period. For FY23, it saw net sales of $14.240 billion, which exhibits a growth of 12.3% on reported basis and 13.1% on operational basis.
It has received the US Food and Drug Administration (FDA) approval of FARAPULSE™ Pulsed Field Ablation (PFA) System for isolation of pulmonary veins. This assists treatment of drug-resistant, recurrent, symptomatic, paroxysmal atrial fibrillation (AF). It completed acquisition of Relievant Medsystems, Inc., which is privately-held medical tech company establishing and commercializing only the US FDA-cleared system, Intracept® Intraosseous Nerve Ablation System, for the purposes of vertebrogenic pain.
It expects net sales growth for FY24 in comparison to prior-year period, to be in range of ~8.5% – 9.5% on reported basis, and ~8% to 9% on organic basis.
2. AbbVie Inc.
AbbVie Inc. is pharmaceutical company having strong exposure to immunology and oncology.
It has announced completion of its acquisition of ImmunoGen. As a result of this, ImmunoGen is now part of AbbVie. The company reported full-year diluted EPS of $2.72 on GAAP Basis, exhibiting a decline of 59.0% and adjusted diluted EPS of $11.11, a fall of 19.3%.
Such results include unfavorable impact of $0.42 per share associated to 2023 acquired IPR&D and milestones expense.
The company announced FY net revenues of $54.318 billion, which exhibits a fall of 6.4% on a reported basis and 5.9% on an operational basis. Its results were supported by strong operational execution and overperformance from the non-Humira growth platform.
It is well-positioned to fully absorb Humira erosion and saw modest operational revenue growth, followed by return to healthy growth in 2025 and high single-digit compounded growth through end of this decade.
It has issued its adjusted diluted EPS guidance for FY24 of $11.05 – $11.25. It includes $0.32 per share dilutive impact associated to proposed ImmunoGen and Cerevel Therapeutics acquisitions, which should close in middle of 2024.
Its 2024 adjusted diluted EPS guidance does not include impact from acquisition of IPR&D and milestones which might be incurred during 2024.
It has reaffirmed its expectations for high single-digit compounded annual revenue growth rate through the end of 2029.
Barclays increased its target price on the company’s shares from $175.00 to $185.00, giving stock an “Overweight” rating in a report dated February 5th. William Blair increased shares of the company from “Market perform” rating to an “Outperform” rating.
3. The Cigna Group
The Cigna Group mainly offers pharmacy benefit management and health insurance services.
It has released strong FY23 results, exhibiting revenue and earnings growth throughout diversified portfolio of businesses. 2023 saw consistent execution and sustained growth.
Shareholders’ net income for 4Q23 came in at $1.0 billion, or $3.49 per share, which includes net after-tax loss of $552 million, or $1.88 per share. This was mainly associated with loss on sale of businesses, a deferred tax benefit, and charge for organizational efficiency plan in comparison with $1.2 billion, or $3.91 per share, for 4Q23.
Total revenues for 4Q23 went up by 12% from 4Q22, exhibiting strong growth throughout Evernorth Health Services and Cigna Healthcare. Its outlook for FY24 adjusted revenues is of minimum $235.0 billion.
Conclusion
While above are some of the hot medical stocks which hedge funds are buying right now, there are several other stocks which are on their watchlist.
As per Commonwealth Fund, the US spent ~16.8% of GDP on healthcare in 2019. Germany was regarded as second-highest ranking country, expecting ~11.7%, followed by Switzerland, which spends ~11.3%. The US healthcare is more expensive in comparison to most of the countries.