Our indicative theme of Out Of Favor Healthcare Stocks is down by about -9% year-to-date versus the S&P 500 which is up by about 7.9% over the same period. The theme remains up by about 45% since the end of 2017, versus 31% for the S&P 500. While Alexion Pharmaceuticals (NASDAQ:ALXN) is down the least year-to-date, declining by -1%, Alkermes (NASDAQ:ALKS) is down by about -20%.
This theme includes healthcare and pharma companies that have shown strong historical revenue growth, improving fundamentals, and yet have not rallied much this year. Most of these companies are also largely insulated from the Covid-19 pandemic, making them relatively stable bets in the current environment. Moreover, considering their strong historical performance and focus on specialized therapeutic areas, they should offer solid returns in the medium to long-term. Below is a bit more on the companies in our Out Of Favor Healthcare Stocks, their strengths, and relative performance
NovoCure Limited (NVCR), an oncology company that uses electric fields to cure tumors, gained about 4% over the last week. The stock is down by about 3% year-to-date. (related: Alexion Pharmaceuticals: Good Growth But Out Of Favor)
ACADIA Pharmaceuticals (ACAD) a pharma company best known for Parkinson’s disease psychosis drug is down by about -1% over the last week. The stock has fallen about -11% year-to-date.
Alkermes (ALKS), a biopharmaceutical company that focuses on drugs for diseases in the central nervous system including schizophrenia and multiple sclerosis declined by about -4% over the last week. The stock down -20% year-to-date.
Alexion Pharmaceuticals (ALXN) is a pharma company best known for Soliris, a drug used to treat rare disorders, gained about 6% over the last week. The stock remains down -1.1% year-to-date.
BioMarin Pharmaceutical (BMRN) a biotech company focused on enzyme replacement therapies (ERTs) is up about 2% over the last week, although it remains down by about -10% year-to-date.
So, these specialized healthcare stocks might give good returns from current levels. But, what if you’re looking for a more balanced portfolio instead? Here’s a top-quality portfolio to outperform the market, with over 100% return since 2016, versus 55% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk. It has outperformed the broader market year after year, consistently.
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