The healthcare sector is a constant source of innovation and growth. Yet, even amidst the spotlight on industry giants, a realm of underappreciated gems still exists.
The top underappreciated healthcare stocks to buy offer a unique opportunity for savvy investors to capitalize on burgeoning trends and new drug discoveries. While some players may operate in niche segments, their potential for substantial returns makes them compelling growth prospects. As investors continue to seek opportunities for growth within the healthcare sector, these underappreciated healthcare stocks have the potential to outperform the market.
Now, let’s discover the top underappreciated healthcare stocks to buy in April!
Novo Nordisk (NVO)
Novo Nordisk (NYSE:NVO), a Danish multinational pharmaceutical company, is a powerhouse in the diabetes care space. It holds dominant market share in insulin products and continues to innovate with new delivery methods and formulations. Beyond diabetes, Novo Nordisk is expanding its drug pipeline into areas like obesity and weight management.
Novo Nordisk’s GLP-1 therapies platform is on pace to deliver another strong operation year 2024. GLP-1 therapies are a class of medications that address type 2 diabetes and obesity. This has been the company’s bread and butter in recent years, and demand has remained increasingly high.
In FY23, revenue increased an astonishing 31% YOY to $232.26 billion. Obesity care sales skyrocketed 154%, with Ozempic, Rybelsus and Wegovy driving growth. Furthermore, the company saw a record FCF of $83.1 billion. While Novo Nordisk faces competition from other pharmaceutical companies, its leadership in diabetes care and innovation positions it for long-term growth.
United Therapeutics (UTHR)
United Therapeutics (NASDAQ:UTHR) is a specialty pharmaceutical company focused on developing and commercializing rare lung diseases. They are known for their dominant market share for treating pulmonary arterial hypertension.
The past year has truly been transformative for United Therapeutics. The company’s commercial business remains strong, and Tyvaso saw record revenue in Q4 2023. Revenue grew 41% YOY, and they have other pipeline opportunities in their arsenal. They are not a one-trick pony, and the bioengineered organ program holds much promise.
One advantage of United Therapeutics’ niche focus is its limited competition. This allows them to demand premium pricing, translating into double-digit top and bottom-line growth. Management is bullish on the outlook for the 2024 fiscal year, reiterating a $4 billion run rate by 2025. This makes United Therapeutics one of the most underappreciated healthcare stocks to buy in 2024.
Vertex Pharmaceuticals (VRTX)
Vertex Pharmaceuticals (NASDAQ:VRTX) is a Boston-based biotechnology company specializing in addressing treatment for Cystic Fibrosis (CF). CF had limited treatments for many years, but Vertex has revolutionized the landscape.
These drugs address cystic fibrosis and significantly improve patients’ lung function and quality of life. Vertex’s flagship drugs, Trikafta and Kalydeco, have become the standard care for CF. This has aided the company’s growth prospects and acceleration in revenue and EPS. However, Wall Street is excited about the company’s pipeline opportunities beyond CF in 2024.
Most notably, the company’s VX-548 drug is on the brink of FDA approval. The drug is now in Phase 3; they plan to submit a new drug application by mid-2024. Although Vertex primarily focuses on a niche market, the chronic nature of CF ensures a stable and growing patient population. Furthermore, the high efficacy of its drugs translates to strong pricing power, generating significant revenue and FCF from operations. Vertex’s commitment to R&D and combined dominant position in CF treatment suggest its growth trajectory will continue upwards.
On the date of publication, Terel Miles 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.
