Another company with a megatrend in its corner is Cubist Pharmaceuticals (CBST) — the midcap stock that will replace Smithfield Foods in the S&P 400.
The bottom line is that healthcare costs and medication use are on the way up, and the pharma sector is set to cash in.
On top of that, Cubist won an important legal battle earlier this year against Hospira (HSP), a company that was planning a generic-drug challenge against what is currently Cubist’s leading treatment. That’s a big win considering the generic market has been eating countless name-brand drug-makers’ lunch.
And Cubist has been diversifying its portfolio, as it just made two big-time acquisitions that should help it over the long-term, snatching up antibiotics makers Trius Therapeutics and Optimer Pharmaceuticals.
CBST is expected to achieve 28% earnings growth annually during the next half-decade. So while you might wait for a pullback before jumping in considering CBST’s 60% year-to-date climb, keep this midcap stock on your radar.