Be it good or bad times, people will still fall sick. This is often said in a time of a global recession. That is why medical stocks will always thrive during a recession. With the COVID-19 pandemic raging on, this is the reality we face today. You often hear how industries like the automotive industry struggle to keep their businesses afloat during economic uncertainties. However, this is not the case for the medical industry. Top medical stocks have always shown resilience when adversity hits the stock market. We can clearly see that playing out in the stock market today.
Companies like Pfizer (PFE Stock Report) and Alexion Pharmaceuticals (ALXN Stock Report) have shown how they can navigate through the pandemic. Both stocks have been up by 33% and 61% since March. By looking at the S&P 500 Health Care, we also see a 44% increase since the March low. This is a clear indication that medical stocks have been leading the stock market recovery. It is also worth noting that the S&P 500 Health Care is now higher than it has ever been.
With that in mind, you would think that medical stocks have peaked at the share price. Or could there still be room for them to make further gains? As the pandemic is likely to drag on into late 2021, COVID-19 related illnesses are expected to increase. Healthcare systems will be put to the test and medical industries will have to cope with this demand. If they prevail, investors who have backed medical stocks could be on the winning end when the pandemic is over.
- Are These The Best Social Media Stocks To Buy Before The End Of 2020?
- Top Retail Stocks To Buy In Q4 2020? 3 Names To Watch
As more people are staying at home, medical needs will need to be dispensed virtually. Teladoc Health (TDOC Stock Report) is one of the medical companies that offer comprehensive virtual care. Its services span the spectrum of healthcare needs across its 51.5 million members. The company is currently the largest virtual care provider with its unprecedented breadth and scale.
Teladoc has enjoyed a year-to-date increase of 165% and has a share price of $221.29. This is a given as demand for virtual care had increased by 40% compared to before COVID-19. The company also attributes this to greater awareness and acceptance of virtual care. With lower cost sharing added into the mix, you can see how this has provided sustained growth for the company. Teladoc has reported a second quarter revenue increase of 85%, to $241 million year-over-year. The company had also reported a total visit increase of 203% to 2.8 million.
The company notes that despite areas no longer being considered COVID-19 hotspots, it still sees twice as many patient visits compared to last year. With the COVID-19 pandemic, it has accelerated the virtual care needs of consumers and providers alike. More people realize how feasible virtual healthcare can be and are capitalizing on it. This shift in adoption will drive the company’s success and will continue to provide momentum into 2020 and beyond. Given the significant level of change in the medical industry, Teladoc anticipates year-over-year revenue growth of 30% to 40%. With such prospects, is TDOC stock a stock to have in your portfolio?Best Medical Stocks To Buy [Or Avoid] This Week: Illumina Inc.
Illumina (ILMN Stock Report) has been in the limelight for all the right reasons. The company specializes in cancer and complex disease genetic research. Illumina is a world leader in next-generation sequencing (NGS) technology. With NGS, researchers will be able to understand transmission routes, mutation rates, and vaccine development. Be it COVID-19 or cancer, this company is the key to understanding the genetic material of these diseases.
The company has enjoyed a 55% increase in market price since March despite some setbacks recently. In September, the company had announced that it planned to acquire GRAIL for $8 billion. GRAIL however was founded by Illumina. This sent the market into a sell-off of Illumina shares. However, this could be an opportunity for investors to buy the dip. This is because GRAIL develops liquid biopsies. These are blood tests that can detect cancer at an earlier stage and in a less painful manner. The addressable market GRAIL is targeting could grow to $75 billion by 2035 so there is a lot of potential in this acquisition.
If GRAIL is successful in developing its liquid biopsy products, Illumina will stand to benefit from this acquisition. Furthermore, the company promises that its newest line of NovaSeq machines will bring genetic sequencing to a price of $100. The ongoing price reduction will no doubt expand the market beyond its current size. Analyst estimates that the sequencing market could grow to $25.5 billion by 2025 as well. With the long-term potential surrounding ILMN stock, it could end up being an investor’s favorite.Best Medical Stocks To Buy [Or Avoid] This Week: Intuitive Surgical Inc.
When you think of the future of the medical industry, Intuitive Surgical (ISRG Stock Report) comes to mind. The company is a leader in robotic-assisted surgery. To date, the company has helped tens of thousands of surgeons perform 7 million procedures worldwide. By using precise and efficient robots, the company excels in minimally invasive care. Its da Vinci surgical system will help enhance surgeon capabilities. It provides precision, less bleeding, and faster recovery times.
This medical stock has enjoyed a year-to-date upswing of 26%, sitting at 752.68 per share. Despite the setbacks from the pandemic, the company reported a 7% increase in procedures worldwide in the third quarter. This reflects a partial recovery from the disruption caused by the COVID-19 pandemic. Despite the drawbacks, the company has made a steady recovery in share price.
Today, it is estimated that only 2% of worldwide surgeries are robotic-assisted. This market will no doubt grow rapidly in the near future. As the development of robotics continues to improve, surgeons will continue to utilize robots to help increase surgery success rates. Analysts believe that the market will be worth $8.24 billion in revenue by 2025. Despite the hefty price tag for its da Vinci system, the company offers leasing arrangements for hospitals. With that, Intuitive Surgical will be able to attract a wider range of customers in the long run.