Betting on healthcare’s future via healthcare stocks is one of the safest long-term bets you can make. Though changes and advances happen rapidly, healthcare is one industry that is here to stay. It offers a unique investment opportunity at the intersection of innovation and demand.
The best healthcare stocks to buy today aren’t necessarily the old, legacy pharma giants or even bulk medical device manufacturers. Though each sector has its strengths and weaknesses, many of the more mature healthcare stocks have limited room to run due to limited innovation. Instead, to find the best healthcare stocks to buy, look for two attributes. So, let’s explore three that offer a solid operational model today and massive market potential tomorrow.
Vertex Pharmaceuticals (VRTX)
Vertex Pharmaceuticals (NASDAQ:VRTX) is on a hot streak. Recent clinical results for an opioid alternative therapy sent shares soaring by more than 10% upon the initial report. Also, the company’s financial strength is well-positioned to maintain momentum, pressing further toward an opiate-free future.
VRTX’s core market offering helps treat cystic fibrosis, and product sales climbed 6% in the previous quarter. At the same time, the company increased its income by 11% and maintains a substantial cash position.
Better yet, the company’s value goes beyond its opioid alternatives. VRTX is engaged in some next-gen healthcare tech that will change the industry forever. The company’s strategic partnership with the leading gene editing biotech firm highlighted below sets the stage for a new era in healthcare.
Crispr Therapeutics (CRSP)
Crispr Therapeutics (NASDAQ:CRSP) is indisputably the leading player in the field of next-gen healthcare stocks. The company focuses on gene editing, an emerging tech that just hit a major milestone.
Recently, the FDA approved the world’s first gene-editing treatment. This remarkable therapeutic, Casgevy, represents the pinnacle of Crispr and Vertex’s development prowess to effectively address debilitating Sickle Cell Disease. The drug’s approval marks a monumental moment in the field of genomics. Importantly, it signals a new era of possibilities among healthcare stocks.
However, markets remained lukewarm after the bombshell approval announcement, which surprised many. Most bearish sentiment comes from short-term practical considerations. The market’s evaluation considers the total addressable market (TAM) for Casgevy. That is estimated to be approximately 100,000 American patients, along with the price per patient, which exceeds $2 million.
True, it may seem that short-term financial gains might not offset the significant R&D as well as operational costs. Yet, this viewpoint doesn’t capture the long-term big picture. Casgevy’s approval signifies that genomics is now a viable treatment strategy for various conditions. Moreover, it injects renewed enthusiasm among CRSP’s bullish investors. And this creates a massive buying opportunity as shares remain suppressed.
Intuitive Surgical (ISRG)
Intuitive Surgical (NASDAQ:ISRG) is a leading player in the healthcare industry, ISRG capitalizes on the growing trend of robotics use in surgical procedures.
Unlike other small-cap healthcare stocks, ISRG is a well-established and reliable company. It’s listed on the NASDAQ-100 and S&P 500, solidifying its position in the market.
Despite relative overvaluation, analysts love the stock. Out of 23 analysts polled, 18 have rated the stock a buy, indicating strong confidence in its potential despite its steep price. Interestingly, none of the analysts suggest selling the stock, with the remaining five analysts recommending a hold.
The most recent quarter revealed encouraging trends for ISRG, indicating strong growth prospects. Procedures utilizing ISRG’s surgical robotics platform increased by 19% during this period, demonstrating a compound annual growth rate (CAGR) of 17% since 2019. Additionally, both revenue and income have experienced significant growth, with a 12% and 29% increase, respectively.
If you’re hunting for hot healthcare stocks to buy, anchoring a portfolio with a reliable (but innovative) firm like ISRG is a winning play.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
