India markets closed

5 Health Care Stocks to Bet on as Coronavirus Woes Linger

Sreoshi Bera

Even though the coronavirus pandemic has wreaked havoc on the global economy, one industry in particular has held its ground. The health care industry has been mostly outperforming the broader market since Mar 23, even when the S&P 500 hit its recent low.

While drug makers keep looking for cure or vaccines, other sectors of the health care industry are making substantial progress. The pandemic has accelerated some health care trends like telemedicine, remote monitoring and diagnostics.

Coronavirus Vaccine Trials & Testing Boost Industry

Since the outbreak, pharmaceutical companies world over are working around the clock to find a cure or vaccine. Over a 100 vaccine candidates are now under trials and the FDA is giving fast track designation to many so that companies can proceed without much delay. Drug makers are also taking steps to provide essential services during this health crisis.

In fact, with major businesses shut down, the stock market now pinning all hopes on coronavirus drugs. Moreover, stocks of these small and large pharmaceutical companies remain vulnerable to any news of clinical trials.

Shares of Moderna, Inc. MRNA gained 19.6% on May 18 after the company reported that its COVID-19 vaccine had positive early results. The company’s shares have gained 195% so far this year even though the company hasn’t come up with any vaccine yet.

Here is our top pick in this space-

Hologic, Inc. HOLX, a medical technology company that develops, manufactures, and supplies diagnostics products. Due to the pandemic, there has been a spike in demand for testing equipment. In mid-May, the company announced the receipt of the FDA’s Emergency Use Authorization (EUA) for its Aptima SARS-CoV-2 assay, which can be used to detect SARS-CoV-2, the virus causing coronavirus.

The company belongs to the Zacks Medical - Instruments industry and has an expected earnings growth rate of 12.3% for the next quarter. The Zacks Consensus Estimate for its current-year earnings has moved 5.1% up over the past 30 days. Hologic carries a Zacks Rank #2 (Buy).

TeleMedicine Making Significant Progress

With social-distancing orders in place and hospitals constantly facing acute shortage of beds and medical personnel, telemedicine seems to have offered a feasible solution in consultation. Additionally, with several patients at home care, remote monitoring and diagnostics equipment are also witnessing a spike in demand.

In fact, government recommends patients who suspect of being infected to opt for a telehealth visit before going to the emergency room. This in turn would reduce the risk of exposing others to the virus and will also help in screening COVID-19 patients who can recover in home quarantine. (Read More: 5 Digital Health Stocks to Soar Amid Coronavirus Crisis)

Here are two stocks that are enjoying the boom in telemedicine and remote monitoring services –

Teladoc Health, Inc. TDOC provides virtual healthcare services on a business-to-business basis. The company belongs to the Zacks Medical Services industry and has an expected earnings growth rate of 36.6% for the current quarter.

The Zacks Consensus Estimate for its current-year earnings has risen 0.9% over the past 60 days. Teladoc Health carries a Zacks Rank #2.

DexCom, Inc. DXCM is a medical device company. The company has made substantial progress in remote glucose monitoring devices for diabetes patients. The company’s expected earnings growth rate for the current quarter is more than 100% against the Zacks Medical - Instruments industry’s projected earnings decline of 40%.

The Zacks Consensus Estimate for its current-year earnings has risen 0.9% over the past 60 days. DexCom carries a Zacks Rank #2.

Health Care Beyond COVID-19

While pharmaceutical companies are racing against time to find a cure or vaccine for coronavirus, many other are continuing research and trails for critical disease like cancer. Several companies have been conducting research for years to find a permanent cure for this life-threatening disease and a few are expected to provide results in the second half of 2020.

Here are two companies that belong to the Zacks Medical - Biomedical and Genetics industry and seem to have bright prospects in the field.

Celyad SA CYAD, a clinical-stage biopharmaceutical company, focuses on the development of CAR-T cell-based therapies for the treatment of cancer. By the end of May, the company is expected to report updated data from the Phase I alloSHRINK study of CYAD-101. The therapy has already shown anti-tumor activity in two out of 12 patients with a partial response in three-month duration.

The company has an expected earnings growth rate of 0.4% for the current year. The Zacks Consensus Estimate for its current-year earnings has moved up 1.9% over the past 60 days. Celyad carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NuCana plc NCNA is a clinical-stage biopharmaceutical company, engaged in the development of products for the treatment of cancer. At the beginning of May, NuCana announced that it has restarted enrollment for its Phase 3 NuTide:121 trial, which is examining Acelarin and cisplatin in front-line biliary tract cancer patients.

The company has an expected earnings growth rate of 11.9% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 3.1% over the past 90 days. NuCana flaunts a Zacks Rank #2.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021. 

Click here for the 6 trades >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Hologic, Inc. (HOLX) : Free Stock Analysis Report
 
DexCom, Inc. (DXCM) : Free Stock Analysis Report
 
Moderna, Inc. (MRNA) : Free Stock Analysis Report
 
Teladoc Health, Inc. (TDOC) : Free Stock Analysis Report
 
Celyad SA (CYAD) : Free Stock Analysis Report
 
NuCana PLC Sponsored ADR (NCNA) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.