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Validea's Top Five Healthcare Stocks Based On Warren Buffett - 7/15/2018


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The following are the top rated Healthcare stocks according to Validea's Patient Investor model based on the published strategy of Warren Buffett . This strategy seeks out firms with long-term, predictable profitability and low debt that trade at reasonable valuations.

BIOGEN INC ( BIIB ) is a large-cap growth stock in the Biotechnology & Drugs industry. The rating according to our strategy based on Warren Buffett is 93% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Biogen Inc. is a biopharmaceutical company. The Company focuses on discovering, developing, manufacturing and delivering therapies to people living with serious neurological, rare and autoimmune diseases. The Company markets products, including TECFIDERA, AVONEX, PLEGRIDY, TYSABRI, ZINBRYTA and FAMPYRA for multiple sclerosis ( MS ), FUMADERM for the treatment of severe plaque psoriasis and SPINRAZA for the treatment of spinal muscular atrophy (SMA). It also has a collaboration agreement with Genentech, Inc. (Genentech), a member of the Roche Group, with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, chronic lymphocytic leukemia (CLL) and other conditions, GAZYVA indicated for the treatment of CLL and follicular lymphoma, and other anti-CD20 therapies. The Company's product candidate includes OCREVUS; Biosimilar adalimumab; Aducanumab; E2609; BIIB074; BAN2401; Opicinumab; CIRARA; BIIB061; BIIB054; BIIB067, and BIIB068.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

EARNINGS PREDICTABILITY:PASS
DEBT SERVICE:PASS
RETURN ON EQUITY:PASS
RETURN ON TOTAL CAPITAL:PASS
FREE CASH FLOW:PASS
USE OF RETAINED EARNINGS:PASS
SHARE REPURCHASE:PASS
INITIAL RATE OF RETURN:PASS
EXPECTED RETURN:PASS

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

NOVO NORDISK A/S (ADR) ( NVO ) is a large-cap growth stock in the Biotechnology & Drugs industry. The rating according to our strategy based on Warren Buffett is 85% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Novo Nordisk A/S is a global healthcare company engaged in diabetes care. The Company is also engaged in the discovery, development, manufacturing and marketing of pharmaceutical products. The Company operates through two business segments: diabetes and obesity care, and biopharmaceuticals. The Company's diabetes and obesity care segment covers insulin, GLP-1, other protein-related products, such as glucagon, protein-related delivery systems and needles, and oral anti-diabetic drugs. The Company's biopharmaceuticals segment covers the therapy areas of hemophilia care, growth hormone therapy and hormone replacement therapy. The Company also offers Saxenda product to treat obesity. It offers a range of products, including NovoLog/NovoRapid; NovoLog Mix/NovoMix; Prandin/NovoNorm; NovoSeven; Norditropin, and Vagifem. As of December 31, 2016, it marketed its products in over 180 countries. Its regional structure consists of two commercial units: North America and International Operations.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

EARNINGS PREDICTABILITY:PASS
DEBT SERVICE:PASS
RETURN ON EQUITY:PASS
RETURN ON TOTAL CAPITAL:PASS
FREE CASH FLOW:PASS
USE OF RETAINED EARNINGS:PASS
SHARE REPURCHASE:NEUTRAL
INITIAL RATE OF RETURN:PASS
EXPECTED RETURN:FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

INTUITIVE SURGICAL, INC. ( ISRG ) is a large-cap growth stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on Warren Buffett is 77% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Intuitive Surgical, Inc. (Intuitive) designs, manufactures and markets da Vinci Surgical Systems, and related instruments and accessories. The Company's da Vinci Surgical System consists of a surgeon's console, a patient-side cart and a vision system. The da Vinci Surgical System translates a surgeon's hand movements, which are performed on instrument controls at a console, into corresponding micro-movements of instruments positioned inside the patient through small incisions or ports. The da Vinci Surgical System provides its operating surgeons with control, range of motion, tissue manipulation capability and three-dimensional (3-D), high-definition ( HD ) vision. Intuitive has four generations of da Vinci Surgical System: the da Vinci Xi Surgical System, the da Vinci Si Surgical System, the da Vinci S Surgical System and the standard da Vinci Surgical System. The Company's instruments and accessories include EndoWrist Instruments and da Vinci Single-Site.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

EARNINGS PREDICTABILITY:PASS
DEBT SERVICE:PASS
RETURN ON EQUITY:PASS
RETURN ON TOTAL CAPITAL:PASS
FREE CASH FLOW:PASS
USE OF RETAINED EARNINGS:PASS
SHARE REPURCHASE:NEUTRAL
INITIAL RATE OF RETURN:PASS
EXPECTED RETURN:FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

CHEMED CORPORATION (CHE) is a mid-cap growth stock in the Healthcare Facilities industry. The rating according to our strategy based on Warren Buffett is 72% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Chemed Corporation purchases, operates and divests subsidiaries engaged in various business activities. The Company operates through two segments: the VITAS segment (VITAS) and the Roto-Rooter segment (Roto-Rooter). The Company's VITAS provides hospice and palliative care services to its patients through a network of physicians, registered nurses, home health aides, social workers, clergy and volunteers. VITAS is the provider of hospice services in an industry dominated primarily by small, non-profit, community-based hospices. VITAS provides hospice care to Medicare beneficiaries participating in these managed care programs. A portion of its VITAS business is operated in the state of Florida. The Roto-Rooter segment provides plumbing, drain cleaning, water restoration and other related services to both residential and commercial customers.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

EARNINGS PREDICTABILITY:PASS
DEBT SERVICE:PASS
RETURN ON EQUITY:PASS
RETURN ON TOTAL CAPITAL:PASS
FREE CASH FLOW:PASS
USE OF RETAINED EARNINGS:FAIL
SHARE REPURCHASE:PASS
INITIAL RATE OF RETURN:PASS
EXPECTED RETURN:FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

HENRY SCHEIN, INC. (HSIC) is a large-cap growth stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on Warren Buffett is 72% based on the firm's underlying fundamentals and the stock's valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Henry Schein, Inc. is a provider of healthcare products and services primarily to office-based dental, animal health and medical practitioners. The Company operates through two segments: healthcare distribution, and technology and value-added services. The healthcare distribution segment distributes consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. The technology and value-added services segment provides software, technology and other value-added services to healthcare practitioners. Its technology group offerings include practice management software systems for dental and medical practitioners and animal health clinics. The Company provides its services to dental practitioners and laboratories, animal health clinics and physician practices, as well as government and institutional healthcare clinics.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

EARNINGS PREDICTABILITY:PASS
DEBT SERVICE:PASS
RETURN ON EQUITY:PASS
RETURN ON TOTAL CAPITAL:PASS
FREE CASH FLOW:PASS
USE OF RETAINED EARNINGS:FAIL
SHARE REPURCHASE:PASS
INITIAL RATE OF RETURN:PASS
EXPECTED RETURN:FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

Since its inception, Validea's strategy based on Warren Buffett has returned 225.62% vs. 163.90% for the S&P 500. For more details on this strategy, click here

About Warren Buffett : Warren Buffett is considered by many to be the greatest investor of all time. As the chairman of Berkshire Hathaway, Buffett has consistently outperformed the S&P 500 for decades, and in the process has become one of the world's richest men. (Forbes puts his net worth at $37 billion.) Despite his fortune, Buffett is known for living a modest lifestyle, by billionaire standards. His primary residence remains the gray stucco Nebraska home he purchased for $31,500 nearly 50 years ago, according to Forbes, and his folksy Midwestern manner and penchant for simple pleasures -- a cherry Coke, a good burger, and a good book are all near the top of the list -- have been well-documented.

About Validea : Validea is an investment research service that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks
Referenced Symbols: BIIB , MS , NVO , ISRG , HD



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