In this piece, we will take a look at the 14 best medical stocks to invest in according to hedge funds. If you want to skip our overview of the medical and healthcare industry, then you can take a look at the 5 Best Medical Stocks To Invest In According to Hedge Funds.
The medical and healthcare industry is one of the biggest in the world. The medical industry is assured of a steady demand for its products and services simply due to the fact that human beings are biological creatures. This means that medical stocks such as Pfizer Inc. (NYSE:PFE) and hospital stocks such as Tenet Healthcare Corporation (NYSE:THC) are some of the biggest in the world. It also means that these stocks have the potential to capitalize on trends that can suddenly appear due to crises such as the coronavirus pandemic. While the fast paced nature of news cycles in the 21st century means that public focus quickly changes focus, in the immediate aftermath of the pandemic’s rapid spread in 2020, investors were fretting and would have given an arm and a leg to prod the crystal ball into telling them which medical stock would be the right bet when it came to navigating the global healthcare prices.
As time would tell, medical stocks like Pfizer and the Cambridge, Massachusetts based biotechnology company Moderna, Inc. (NASDAQ:MRNA) were some of the hottest due to their vaccines. During the roughly year and a half between December 2019 and September 2021, Moderna’s shares appreciated by a whopping 429% on the stock market – a result that shows that even small bets made at just the right time can yield juicy profits for investors from all walks of life. Pfizer’s stock gained a more modest 50% during the same time period; but the difference between these gains is one that is understandable since Pfizer’s current market capitalization of $155 billion is more than four times of Moderna’s.
Additionally, another key difference between Moderna and Pfizer also applies to the broader categories of medical stocks that include high growth sectors such as biotechnology and somewhat more stable ones like medical device manufacturers and hospital operators. Pfizer, like its peers Eli Lilly and Company (NYSE:LLY), Johnson & Johnson (NYSE:JNJ), and Merck & Co., Inc. (NYSE:MRK), benefits from one of the classic principles of business management, a.k.a, diversification. These medical stocks have the luxury of sizeable balance sheets that allow them to participate in markets for simple medicines that can be produced at mass scale like blood thinners, as well as medical industry segments requiring massive capital expenditure and research capabilities such as biotechnology and genetic engineering.
However, with genetic engineering having entered the conversation, this particular area of medicine benefits from smaller companies that are able to laser focus on being able to change the very ‘code’ of the human body. At the same time, while the glitzy and glamorous nature of high technology areas such as artificial intelligence means that the bulk of public and media attention remains focused on them, recent months have also seen medical stocks involved in the genomics industry make strides. If you’re interested, you can check out 12 Best Genomics Stocks To Buy Now for a detailed look at these stocks.
So what’s big in genomics? Well, medical stocks Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) and BridgeBio Pharma, Inc. (NASDAQ:BBIO) scored big wins in December 2023 when the Food and Drug Administration (FDA) approved the first therapies for sickle cell disease that use gene therapy. According to Yale Medicine, Vertex’s Casgevy essentially ‘slices’ a patient’s DNA to improve odds of fighting sickle cell disease while BBIO’s Lyfgenia introduces substances that improve blood health.
Yet, mega medical stocks Eli Lilly and Novo Nordisk A/S (NYSE:NVO) are also all the hype these days as their medications finally provide an off the shelf solution to lose weight. So much so that Eli Lilly’s shares are up by a whopping 380% since 2020 while Novo Nordisk’s stock has gained 275% over the same time period. Weight loss drugs are now a no longer a thing of the future, and investors have baked in their potential into medical stocks as well. You can read 11 Best Weight Loss Stocks To Invest In for more details.
With these details, let’s look at some top medical stocks. Some notable picks are Thermo Fisher Scientific Inc. (NYSE:TMO), Danaher Corporation (NYSE:DHR), and UnitedHealth Group Incorporated (NYSE:UNH).
A veterinarian conducting a physical exam on a four-legged patient in a veterinary hospital, highlighting the company’s work in veterinary health.
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