5 Health Care Stocks to Bet on as Coronavirus Woes Linger

In the midst of finding a cure for coronavirus vaccine, some sectors of the health care industry are actually making substantial progress. The health care industry has been mostly outperforming the broader market since March 23, even when the S&P 500 hit its recent low. The industry has to hold its ground even if the global economy is greatly affected due to the pandemic. The pandemic has accelerated some health care trends like telemedicine, remote monitoring, and diagnostics.

Over a hundred vaccine candidates from pharmaceutical companies all over the world are now under clinical trials, of which 78 are confirmed as active and 37 are unconfirmed. The most advanced candidates have recently moved into clinical development, including mRNA-1273 from Moderna, Ad5-nCoV from CanSino Biologicals, INO-4800 from Inovio, and LV-SMENP-DC and pathogen-specific aAPC from Shenzhen Geno-Immune Medical Institute. Numerous other vaccine developers have indicated plans to initiate human testing in 2020.


While pharmaceutical companies are racing against time to find a cure or vaccine for coronavirus, many others are continuing research and trails for critical diseases 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.

Drugmakers are also taking steps to provide essential services during this health crisis. With most of the large companies all over the world shutting down, the stock market is now rooting on the coronavirus vaccine. Stocks of these small and large pharmaceutical companies remained 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.


Among our top pick pharmaceutical companies are the following:

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).

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. With social distancing orders in place and hospitals constantly facing a shortage of beds and medical personnel, telemedicine seems to have offered a feasible solution in consultation. And, Teladoc Health, Inc. TDOC is enjoying the boom in telemedicine and remote monitoring services along with DexCom, Inc. DXCM. 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.

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


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 a 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.

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.

SOURCE: smart.ly


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