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7 Healthcare Stocks to Buy for Changing Demographics

healthcare stocks - 7 Healthcare Stocks to Buy for Changing Demographics

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Healthcare is a very broad industry, ranging from temporary professional services, to insurance to equipment to drugs. And our collection of healthcare stocks here is fairly diverse as well.

But the fact is, most of these sectors are intertwined in the industry. One feeds another.

Also remember that during the pandemic many hospital systems were pushed to the breaking point and supplies of necessary but simple items — like masks and personal protection equipment — were in short or no supply.

At the same time, many investors were more focused on the companies that were developing vaccines. Drug companies were the meme stocks at the time.

But now that the storm has lessened, the entire industry is finally catching its breath and can start to build out on long-term plans again. And the biggest of those long-term plans is the graying of America as millions of baby boomers hit retirement age every year for the next two decades.

The seven healthcare stocks to buy for changing demographics — and a changing industry — are below.

  • Apollo Medical Holdings (NASDAQ:AMEH)
  • Fulgent Genetics (NASDAQ:FLGT)
  • Joint Corp (NASDAQ:JYNT)
  • Surgery Partners (NASDAQ:SGRY)
  • HCA Healthcare (NYSE:HCA)
  • Tenet Healthcare (NYSE:THC)
  • Laboratory Corp (NYSE:LH)

Healthcare Stocks: Apollo Medial Holdings (AMEH)

stethoscope on a stock chart representing healthcare stocks to buy
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This California healthcare management company has been around in one form or another since the early 1990s. It started as a back-office management solution and has expanded significantly since then. Now it not only provides back-office solutions to doctors and healthcare facilities, but it also has acquired a number of Affordable Care Act-compliant healthcare facilities of its own.

AMEH’s core strength is automating as much of the process as possible to save time in analyzing, billing and processing claims for procedures. It has explored the challenges of doctors being swamped with paperwork, leaving little time for patient interaction and care.

This innovative approach to patient care is proving itself and the company continues to expand. The stock is up 158% year-to-date, and there’s plenty of room for growth left, especially if it can nationalize its model.

This stock gets a Portfolio Grader A rating.

Fulgent Genetics (FLGT)

a visualization of DNA in a vial
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One of the newer developments in healthcare is the genetics sector. Once limited to research labs and very specialized medical practices, now genetics analysis is commonplace.

Also, genetics screening was very targeted in scope, meaning you may be able to test for hereditary diseases but not newborn genetics. Today, genetics companies are incredibly popular and becoming widespread. That means the race is on to get market share.

FLGT is one of the companies that offers a broad range of genetic testing, even down to at-home Covid-19 testing kits.

Not only is genetic testing a valuable tool but it also opens the door to advanced testing of other non-genetic disorders or diseases. This is relatively young healthcare stock, but it’s grown quickly and has become a player in this sector.

The stock is up 45.6% year-to-date with a current price-to-earnings (P/E) ratio of just 4.8.

This stock gets a Portfolio Grader A rating.

Joint Corp (JYNT)

a doctor looks at a tablet
Source: Shutterstock

No, this company isn’t one of the new cannabis stocks. It’s actually all about human joints. A chiropodist in Arizona decided that he wanted to make his profession more available to people and develop a franchise model for chiropractic medicine so it was convenient, consistent and affordable.

Twenty-two years later, The Joint is going strong. And as boomers age, heading into The Joint for a quick tune up is a preferred step before upping the doses of painkillers or other pills.

JYNT currently has over 500 offices around the U.S. And it has packages for treatments that build in discounts if a patients’ insurance doesn’t cover some or all of the visits. The fact is, there are many people that have chronic pain and are much more open to alternative treatments, especially after the oxycodone mess.

JYNT is up 182% year-to-date and is one of those healthcare stocks that is in growth mode, so valuations aren’t as important as new franchise openings.

This stock gets a Portfolio Grader A rating.

Surgery Partners (SGRY)

surgeons operating on a patient
Source: Dmytro Zinkevych / Shutterstock.com

Given the aging population in the U.S., coupled with the lower birthrate, the challenge for the current healthcare system, and the healthcare stocks that represent it, is developing efficient models that can provide the services patients need while keeping costs and back-office support to a minimum.

SGRY develops partnerships with physicians and surgeons to help them better manage their practices. It also builds and maintains outpatient surgery units and surgical hospitals, all with an eye for creating valuable, efficient services for patients and profitable outcomes for its partners. It has now opened its operations to eye care as well.

The model is working, and the stock is booming, up 126% year-to-date. This is another growth-driven story with an interesting model.

This stock gets a Portfolio Grader A rating.

HCA Healthcare (HCA)

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The more traditional model for healthcare services is HCA, which operates hospitals, surgery centers, emergency rooms and urgent care facilities. It has been in operation since 1968, so it goes about its business in a more conservative way than SGRY.

These healthcare stocks are similar, with HCA being the legacy player that offers a long background of success and scale, and the other, new solutions for a change healthcare landscape. This is most obvious in their size. HCA has a $70 billion market capitalization; SGRY has a $5.4 billion market cap.

Because it’s more diversified, HCA manages a broader range of healthcare operations, including more chronic conditions, which tend to make up more of the core business.

Its longevity also means that its growth phase is more dependable, while not as exciting. The stock is up 27.6% year-to-date and trades at a current P/E of 15.7.

This stock gets a Portfolio Grader B rating.

Tenet Healthcare (THC)

stethoscope laying atop medical papers
Source: Shutterstock

Operating under the brands Tenet Health, United Surgical Partners and Conifer Health Solutions, THC operates around 65 hospitals and approximately 500 other healthcare facilities in the U.S.

With a $7.25 billion market cap, it’s larger than SGRY but one-tenth of the size of HCA, yet it has been in operation since 1975.

Growth within these healthcare stocks is focused on putting the right sized facilities into each market so they can run efficiently as often as possible. The concept of building a massive hospital is going the way of the shopping mall.

There’s plenty of growth for all the featured companies in this sector, especially after the pandemic. The stock is up 70% year-to-date but trades at a current P/E of 18.

This stock gets a Portfolio Grader B rating.

Laboratory Corp (LH)

Photo of a rack of multicolored test tubes with a hand in a medical glove reaching to grab one tube
Source: Shutterstock

If you’ve ever gotten a blood test or pretty much any other kind of biopsy or fluid test, it’s more than likely you’ve received a bill from Labcorp. Headquartered in North Carolina, Labcorp is one of the largest clinical laboratory networks in the world, with 36 primary labs located around the U.S. It does close to three million lab tests weekly.

Again, testing is a key component of modern healthcare. More advanced testing means physicians can better target diseases so they can better target treatments. This has benefits for healthcare professionals as well as their patients.

And given Labcorp’s size and scope, it’s unlikely it’s going to get much competition for its services moving forward, even if niches like genetic testing grow. This is a great play on patient-facing diagnostic testing. The stock is up 27% year-to-date, trading at a current P/E of just 9.6.

This stock gets a Portfolio Grader B rating.

On the date of publication, Louis Navellier had long positions in FLGT, JYNT and THC.  Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. 

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article. 

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