If you’re not investing in healthcare stocks these days, you may be missing out on a huge opportunity.
Consider this: We are getting older and living longer as a species. The World Health Organization says that by 2030, 1 in 6 people on Earth will be at least 60 years old.
With an aging population comes more medical issues – either ailments that weaken the bodies or medications and treatments to hold off the aging process as long as possible. We’ll be needing and using more drugs as we get older, will rely more on medical professionals and spend more of our incomes on healthcare.
That’s why the time is now to capitalize on this trend. My Portfolio Grader tool evaluated healthcare stocks and identified several with “A” grades based on their recent performance, momentum, analyst sentiment and quantitative factors.
Snapping up or adding to your positions in these healthcare stocks could be just what the doctor ordered – if you are hoping to get a little richer, that is.
|American Shared Hospital Services
Eli Lilly (LLY)
Drugmaker Eli Lilly (NYSE:LLY) is coming off a strong 2022, where it showed gains of 35%. While it’s been in consolidation mode so far this year, there are indications that the stock may just be taking a breather before going on another run.
The company’s Mounjaro drug for diabetes is making noise as a possible treatment for obesity – something like that could bring huge profits for LLY stock. Lilly is also working on new drugs that could be launched as early as this year to treat Alzheimer’s disease, Crohn’s disease, atopic dermatitis and mantle cell lymphoma.
Lilly brought in revenue of $28.5 million in 2022, but should do even better this year – the company guided for 2023 revenue to be in a range from $30.3 billion to $30.8 billion, with a gross margin of 77%.
LLY stock has an “A” rating in the Portfolio Grader.
Biotech company Ardelyx (NASDAQ:ARDX) has been making some big moves as of late on the strength of its flagship tenapanor drug candidate. Marketed under the name Xphozah, this drug treats kidney disease. Xphozah has already gotten approval from a Food and Drug Administration panel, and its expected to get full regulatory approval in the U.S.
True, Ardelyx is still a penny stock, with a price of less than $3.50. The stock price has been on the move over the last six months, gaining more than 270%. As I’ve said before, a 270% gain in a penny stock is just as good as a 270% gain in a large-cap stock.
Analysts believe that Ardelyx’s kidney disease drug could bring in hundreds of millions of dollars in annual revenue. It already gets about $20 million a year by selling tenapanor as a treatment for irritable bowel syndrome.
ARDX stock has an “A” rating in the Portfolio Grader.
Geron (NASDAQ:GERN) also has a promising drug candidate. Its Imetelstat medication, which recently had a successful phase 3 clinical trial, appears to be on track for approval for the treatment of lower-risk myelodysplastic syndromes.
On top of that, Geron is studying if Imetelstat can also be used for other types of treatment, such as for refractory myelofibrosis or other related disorders. Geron thinks that its Imetelstat sales could reach as much as $3 billion annually by 2030.
That’s a huge number for a stock that has a market cap of just $1.3 billion right now. Geron stock is up 47% over the last three months, and the consensus opinion of analysts is that it could go up another 77% in the next year. GERN stock has an “A” rating in the Portfolio Grader.
Acadia Healthcare (ACHC)
Based in Tennessee, Acadia Healthcare (NASDAQ:ACHC) operates facilities in 39 states and Puerto Rico, with more than 10,800 beds in 246 locations.
Its facilities help people with behavioral problems, post-traumatic stress disorder, eating disorders and substance abuse. It’s the largest stand-alone behavioral healthcare company in the U.S.
The Centers for Disease Control and Prevention estimates that one in 25 adults in the U.S. suffers from a serious mental illness. But there’s a gap in services because often insurance doesn’t cover such care, or Medicaid reimbursements don’t fully cover the cost of treatment. According to the New York Times, staff vacancies in public mental health clinics can run as high as 30%.
Acadia company recently laid out a five-year plan that will prioritize joint ventures in an effort to double revenue. CFO David Duckworth says the company has identified 100 metro areas as potential expansion locations because they don’t have enough behavioral health beds.
So far, it’s a profitable business. Acadia regularly beats analysts’ estimates for earnings and revenue. It’s guided for full-year 2022 revenue to be between $2.58 billion to $2.60 billion, and increase in 2023 to a range of $2.79 billion to $2.86 billion.
ACHC stock has an “A” rating in the Portfolio Grader.
ADMA Biologics (ADMA)
ADMA Biologics (NASDAQ:ADMA) is known for its plasma-derived treatments for patients who suffer from compromised immune systems. It manufactures treatments for people who are either naturally or medically immunocompromised for certain infections.
The stock has been on a tear in recent months, up 86% since August 2022. Barclays recently increased its bet on ADMA stock, increasing the percentage of shares it owns by 316% by buying another 356,000 shares. Overall, Barclays has a $1.1 million interest in ADMA, which is significant for a company with a market cap of less than $800 million.
The company announced that it expects Q4 earnings to be in the range of $49 million to $50 million, which would be a jump of 89% from a year ago. Full-year revenue is expected to come in a range of $153 million to $154 million, which would be an increase of 90% from 2021.
ADMA stock has an “A” rating in the Portfolio Grader.
American Shared Hospital Services (AMS)
Based in San Francisco, American Shared Hospital Services (NYSEAMERICAN:AMS) leases medical equipment to hospitals and medical centers in the U.S. and overseas.
Its products include equipment for radiosurgery, proton beam radiation therapy, intensity-modulated radiation therapy (IMRT) and image-guided IMRT. It partners with some of the best-known facilities in the world, including Johns Hopkins Medical Center in Baltimore, Yale-New Haven Hospital in Connecticut and Tufts Medical Center in Boston.
The stock has been on a roll as of late, rising 30% in the last six months. Earnings for the third quarter included revenue of $4.83 million, which was an increase of 17.8% from a year ago.
AMS stock trades on the NYSE American exchange, which is for small-cap companies. It has an “A” rating in the Portfolio Grader.
Viemed Healthcare (VMD)
Louisiana-based Viemed Healthcare (NASDAQ:VMD) provides in-home medical equipment, including respiratory disease management, home sleep testing, sleep apnea treatment, oxygen therapy services, and more.
Sleep apnea affects as many as 30 million people in the U.S., although only about 6 million are diagnosed, according to the American Medical Association. That leaves a healthy runway of prospective patients for Viemed.
Revenue in the third quarter was $35.76 million, which was an increase of 22.1% from a year ago. The company beat analysts’ estimates for $34.8 million in revenue but missed EPS estimates of 4 cents per share by a penny.
VMD stock is up 38% over the last six months, helping push it to an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article held GERN and ADMA. The research member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.