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3 Healthcare Stocks With Huge Growth Potential


  • Healthcare growth stocks offer great opportunities in 2023.
  • Danaher (DHR): Danaher’s unique business strategy has created a healthcare giant.
  • Charles River Laboratories (CRL): The leader in laboratory animals is set to rebound from a rocky few months.
  • Clearpoint Neuro (CLPT): This small-cap health care equipment innovator is showing healthy revenue growth.
healthcare growth stocks - 3 Healthcare Stocks With Huge Growth Potential

Source: Shutterstock

It’s been a rocky market for growth stocks over the past 18 months. We’ve seen a flurry of layoffs and spending cutbacks from leading tech companies. That, combined with rising interest rates and an acidic macroeconomic environment, has led to a nasty market for growth. Fortunately, there is growth to be found elsewhere. Healthcare growth stocks, for example, offer great promise due to changing demographics.

The baby boomers are a huge demographic group within the American population. As they retire, the demand for healthcare services should grow dramatically. Given their enormous spending power and understandable desires for new therapies, life-changing drugs, and medical devices, there should be plenty of investment opportunities.

So, for investors still looking for a significant upside, it’s time to buy these three healthcare growth stocks now.

DHR Danaher $254.35
CRL Charles River Laboratories $203.83
CLPT Clearpoint Neuro $10.11

Danaher (DHR)

An image of two medical professionals performing a procedure on a patient
Source: Roman Zaiets / Shutterstock.com

Danaher (NYSE:DHR) is a conglomerate focused on the healthcare industry. Over the years, Danaher built up a tremendous enterprise through a continuous hunt for mergers and acquisitions and implementing the Danaher Business System, which focuses on ruthless efficiency.

DHR stock has skyrocketed from just over $1 per share in 1993 to over $250 today. In recent years, the firm’s most significant move was buying GE’s (NYSE:GE) healthcare business, now known as Cytiva, in a blockbuster deal.

Danaher is leading in crucial parts of the healthcare system, such as lab tools and drug discovery. In other words, Danaher receives a chunk of the action, as pharma companies put more money into drug development. And with a market cap of more than $180 billion, Danaher is a giant in its industry, benefiting from numerous economies of scale.

Danaher earned record profits over the past couple of years, as the firm brought in significant incremental revenue related to COVID-19 testing and vaccine development. Investors have sold off DHR shares as that tailwind has ended. However, Danaher should return to form soon and see shares resume their relentless climb higher.

Charles River Laboratories (CRL)

Scientists in a lab
Source: Matej Kastelic / Shutterstock

Charles River Laboratories (NYSE:CRL) is another leader in the drug discovery space. Specifically, Charles River has decades of experience breeding and producing lab animals that go into clinical trials.

Charles River is known for producing clinical rats and mice, but is also involved in the primate space. Recently, that has gotten the company into trouble, as there’s been a government investigation into monkey smuggling in Cambodia. Notably, Charles River has become implicated in the scandal.

It’s never good to get caught up in a federal investigation, and it’s understandable why CRL stock sold off on the news. However, biotech companies still need many lab animals to perform their trials. A misstep in Cambodia will hardly change the fundamentals of the overall industry.

Specifically, Charles River assisted in the research process for 85% of all drugs that received FDA approval in 2021. It’s a tax on the whole drug discovery ecosystem, and with healthcare spending set to rise, Charles River will capture a nice piece of the pie.

In addition, Charles River has built out revenue streams that aren’t reliant on animal models. These include consulting and trial planning services and software, and data analysis related to drug discovery and safety. CRL stock has slumped 30% over the last year, offering investors the rare opportunity to pick up shares at just 20-times forward earnings.

Clearpoint Neuro (CLPT)

A concept image of a glowing blue brain. AI
Source: Andrus Ciprian / Shutterstock.com

Clearpoint Neuro (NASDAQ:CLPT) is a far smaller and riskier healthcare growth stock to buy, but has potentially tremendous upside if things go right.

The company has developed the ClearPoint system, which inserts deep brain stimulation electrodes, biopsy needles, and pharmaceuticals directly into the brain.

Given the tremendous rise in the incidence of Alzheimer’s, Parkinson, and other aging-related brain disorders, there should be a huge market opportunity in this field in the coming years. Alzheimer’s, in particular, is notoriously hard to treat with clinical drugs. That said, Clearpoint’s system could help improve the effectiveness of new therapies aiming at that ailment.

The company partners with leading firms and institutions such as Koninklijke Philips N.V., Blackrock Neurotech, and the University of California San Francisco. And there is already significant commercial demand, with revenues growing from $7 million in 2018 to $21 million last year.

Clearpoint hasn’t yet reached profitability. But its cash burn is rapidly decreasing as its revenues continue to rise. And it is in the correct position to benefit from tremendous long-term demand growth, depending on the future developments within the biotech and pharma space related to brain disorders.

On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

Article printed from InvestorPlace Media, https://investorplace.com/2023/04/3-healthcare-stocks-with-huge-growth-potential/.

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