Global markets are down as fears of an economic downturn triggered a near-term crisis. This is a reminder that corrections can come from most unexpected events. Further, it’s also a time to relook at the portfolio and consider exposure to defensive stocks, such as under-the-radar healthcare stocks.

I must mention at the onset that a 10% to 15% broad market correction would be a good opportunity to accumulate quality growth stocks. However, there are quality healthcare stocks that can be massive value creators in the next five years. As the markets correct, it’s a good time to buy these names as well.

I focused on under-the-radar healthcare stocks that listed this year. Initial public offerings are a good place to spot some quality long-term opportunities. Let’s discuss the reasons that make these healthcare stocks worth considering.

Tempus AI (TEM)

Tempus (NASDAQ:TEM) is a recently listed company in medical technology. Its areas of focus include next-generation sequencing diagnostics, polymerase chain reaction profiling, and molecular genotyping. Tempus also has one of the world’s largest libraries of clinical and molecular data.

Tempus has been on a high-growth trajectory backed by investment in research and development. For 2023, the company reported revenue growth of 65.8% from a year ago to $531.8 million.

The company has been rapidly expanding its genomics product portfolio and that’s likely to boost growth. In June, the healthcare technology company received the U.S. Food and Drug Administration clearance for its Tempus ECG-AF device that uses AI to help identify patients who may be at increased risk of atrial fibrillation.

In July, the Centers for Medicare and Medicaid Services granted “Advanced Diagnostic Laboratory Test” status for Tempus’ next-generation sequencing assay. With continued investment in research and development, it’s likely that Tempus will remain in a robust growth trajectory and I expect TEM stock to trend higher.

Rapport Therapeutics (RAPP)

Rapport Therapeutics (NASDAQ:RAPP) clinical-stage biotech company backed by Johnson & Johnson (NYSE:JNJ) that looks attractive for the long term. The biotech company is focused on discovery and development of small molecule medicines for patients suffering from central nervous system disorders.

Currently, Rapport has three programs in Phase 1 trials. This includes candidates for focal epilepsy, peripheral neuropathic pain, and bipolar disorder. With the initiation of phase two trials in the coming months, 2025 and 2026 is likely to be exciting for Rapport. At the same time, Rapport is working on programs for chronic pain and hearing disorder. Therefore, with a deep pipeline and high financial flexibility, the outlook is positive.

It’s worth noting that there are more than 3 million epilepsy patients over the age of 18 and more than 1.8 million focal epilepsy patients. Therefore, the addressable market is significant. Once the drug candidates are commercialized, revenue growth will likely be robust.

PACS Group (PACS)

PACS Group (NYSE:PACS) is a provider of skilled nursing and assisted living facilities in the United States. The company is on a high-growth trajectory and PACS stock looks attractive at a forward price-to-earnings ratio of 24x.

For 2024, PACS Group has guided revenue of $3.7 billion. Revenue growth is expected at 19% year over year. Two reasons are likely to accelerate revenue growth.

First, the company is present in nine states and aggressively acquiring new facilities. As the number of skilled nursing facilities increase, growth is likely to accelerate. Further, the company’s facilities have a cost advantage over peers. This translated into occupancy rate of 94.6% for mature facilities. Higher utilization will support growth as new facilities mature over the next few years.

It’s also worth noting that for 2024, PACS Group expects adjusted EBITDA of $351 million to $361 million. If robust growth sustains, the company is positioned to deliver healthy cash flows.

On the date of publication, Faisal Humayun did not hold (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.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.