Nowadays, medicine is being tailored to individual patients — even to their DNA. Known as “precision medicine,” this trend first kicked off in earnest only a few years ago. It’s a true game changer for healthcare. Now, by buying certain healthcare stocks, long-term investors can profit tremendously from this revolution.

Moreover, another huge development in the medical space is a jump in the ability to diagnose diseases. For example, cancer is being diagnosed much earlier and more frequently while more prenatal disorders are being found than ever before. In addition to saving millions of lives, these new efficiencies will also greatly lower costs. That will prove lucrative for companies and boost multiple healthcare stocks in the process.

Lastly, even vaccines are becoming easier to develop. Meanwhile, artificial intelligence (AI) is starting to help facilitate drug development.

As such, this list will cover some of the companies that are best positioned to exploit at least one of these game-changing trends. They include the following healthcare stocks to buy:

• Ilumina (NASDAQ:ILMN)
• Invitae (NYSE:NVTA)
• Schrödinger (NASDAQ:SDGR)
• Bionano Genomics (NASDAQ:BNGO)
• Moderna (NASDAQ:MRNA)

Healthcare Stocks to Buy: Ilumina (ILMN)

ILMN stock will probably give investors a relatively rare opportunity: the ability to benefit from both an upcoming likely blockbuster and a large, stable yet rapidly growing business.

What’s the likely blockbuster here? A multi-cancer blood test developed by Grail, a company that Ilumina has agreed to buy. Grail developed the Galleri early detection test to detect over 50 types of cancers, “over 45 of which lack recommended screening tests today” according to the company. Obviously, the early detection of cancer could save millions of lives and greatly lower healthcare costs. As a result, I believe that Galleri is well-positioned to ultimately become a big winner for Ilumina.

Of course, the road to that success will not be altogether easy. For example, the Federal Trade Commission (FTC) has sued to block Ilumina’s acquisition, alleging that the company could unfairly raise prices for its sequencing tests and licensing deals.

However, it’s rare for M&A deals between companies that don’t compete with each other to be blocked. Plus, it seems like Ilumina could accept certain pricing and licensing restrictions that would reduce the FTC’s opposition. Given these points, I expect the Grail agreement to ultimately go through later this year.

As for Ilumina’s established business, its DNA sequencing unit is thriving and should continue to do so. Before the pandemic, this company’s revenue had jumped meaningfully for many consecutive years. Back in 2019, its operating income also jumped to an impressive $1.03 billion, up 17% from $883 million in 2018.

Invitae (NVTA)

Next up on this list of healthcare stocks is NVTA stock. Invitae provides genetic tests for many diseases, “including hereditary cancer, cardiology, neurology, pediatrics, oncology, metabolic conditions, and rare diseases.” For the first quarter, the company also reported that it had “record daily [test] volumes,” as its billable volume surged 72% year-over-year (YOY).

Moreover, in October, Invitae also closed its acquisition of Archer DX, which has developed “precision oncology” treatments. Archer’s Stratafide platform is able to identify DNA changes that can help doctors prescribe the best treatments for cancer patients. The U.S. Food and Drug Administration (FDA) has given Stratafide a breakthrough treatment designation.

Lastly, though, a number of investors — including the large Japanese firm, Softbank (OTCMKTS:SFTBY) — bought $1.2 billion of Invitae’s convertible senior notes back in April. That sizeable investment from institutions should increase confidence in this biotech company’s long-term outlook.

Healthcare Stocks to Buy: Schrödinger (SDGR)

As I noted in a previous column, this company “uses [artificial intelligence] AI to expedite the drug development process, which is currently quite long and arduous.” Moreover, it has made a huge deal with drug-making giant Bristol Myers-Squibb (NYSE:BMY). That agreement could be worth as much as a staggering $2.7 billion to the artificial intelligence company.

In its Q1 results for 2021, Schrödinger reported significantly higher-than-expected revenue and earnings per share (EPS). More specifically, the company’s top line climbed 23% YOY. In conjunction with the results, SDGR also disclosed that it had won another big deal with a large drug maker. This time, the company signed an agreement with AstraZeneca (NASDAQ:AZN).

Validating Schrödinger’s technology and capabilities in a big way, AstraZeneca has greatly widened its previous collaboration with the company and intends to “fully deploy Schrödinger’s platform across all its structurally-enabled small molecule discovery programs.”

But the cherry on top for this pick of the healthcare stocks? If you have doubts in SDGR stock, consider the fact that Bill and Melinda Gates have a stake of more than 10% in the AI firm.

Bionano Genomics (BNGO)

I’ve written multiple exuberant columns about BNGO stock. Why? I just can’t help but be excited and bullish about this company. After all, its technology looks set to literally save tens of millions of lives. Plus, according to InvestorPlace contributor Chris McDonald, now many folks on social media share my enthusiasm for Bionano and its stock.

As I explained back in March, CEO Erik Holmlin has noted that “Bionano’s analytical platform, Saphyr, has an unparalleled ability to detect structural variations of the molecules of DNA […] Small structural variations (SVs) can be the force driving diseases, including cancer.” What’s more, widely used DNA analysis tools from other companies fail to identify most of these SVs.

Moreover, since March, Bionano has gone on to win a major deal with the United Kingdom’s National Health System. It also reported higher-than-expected Q1 sales, sparking a rally for BNGO stock.

Given its revolutionary technology — as well as the fact it trades with a market capitalization under $2.5 billion — Bionano is a real bargain among the healthcare stocks.

Healthcare Stocks to Buy: Moderna (MRNA)

All the way back in February 2020, I quoted one Morgan Stanley analyst as saying that Moderna could develop a vaccine for the novel coronavirus “relatively quickly.” In the piece, I also identified MRNA stock as one of three up-and-coming healthcare stocks

Of course, since then Moderna (as well as Pfizer (NYSE:PFE) and Biontech (NASDAQ:BNTX)) has shown that vaccines based on messenger RNA (mRNA) can be developed quickly indeed. Further, the efficacy and efficiency of Moderna’s vaccine bodes very well for the other vaccines that it’s currently developing. These include solutions for Zika, influenza and much more.

But this isn’t the only thing that makes MRNA stock attractive. On top of its pipeline, there’s a certain confidence that the FDA and the U.S. government in general seem to have in the company.

With Moderna developing a booster shot for its Covid-19 vaccine, as well as multiple vaccines for other widespread diseases, this company and its shares still have a great deal of room to advance.

On the date of publication, Larry Ramer held long positions in BNGO, ILMN, MRNA and SDGR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015.  Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.