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The 3 Best Healthcare Stocks to Buy in May 2024

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Healthcare is a basic human need that can withstand economic downturns. Indeed, this important endeavor receives a huge amount of funds in developed countries globally and the West in particular. Roughly $8.3 trillion annually is devoted to global healthcare, and nearly 50% of that amount is spent in the U.S. Moreover, healthcare spending is increasing meaningfully faster than global GDP. Meanwhile, American firms are always developing lucrative drugs, medical devices and other medical technologies. As a result of this phenomenon, investors can make huge windfalls by buying the stocks of firms with up-and-coming medical products. Here are the three best healthcare stocks to buy in May 2024.

Bionano (BNGO)

Bionano Genomics (BNGO) company logo on a website with blurry stock market developments in the background

Source: Dennis Diatel / Shutterstock.com

Bionano (NASDAQ:BNGO) enables scientists and healthcare practitioners to detect structural variations within DNA. Studies have shown that the detection of these variations leads to a greater number of patients being accurately diagnosed. Further, Bionano’s offerings can allow scientists to fully understand the causes of diseases. A number of gene editing drug makers utilize Bionano’s offering to check the quality of their genes.

The Street has been worried about Bionano’s buoyancy. But last quarter its operating expenses came in at $24.7 million, while it generated $8.8 million of revenue and raised $15.1 million in stock sales. Bionano does not appear to be burning much cash at this point.

Also importantly, its revenue from continuing operations climbed 18% YOY last quarter, while the number of flow cells that it sold for device use jumped 58% YOY to 8,249.

Finally, the American Medical Association is currently meeting to decide on approval of Bionano’s products for the detection of cytogenomic chromosomal abnormalities. Given Medicare’s reliance on AMA approvals to determine its reimbursement policies for lab tests, Bionano’s products will soar if approved.

Tenet Healthcare (THC)

healthcare stocks

Source: Shutterstock

Hospital chain Tenet Healthcare (NYSE:THC) delivered commendable first-quarter results, showing that its business is thriving. The company’s revenue climbed 7% YOY to $5.37 billion. Meanwhile, its operating activities generated $586 million in cash flows last quarter, up from $449 million in Q1 of 2023.

Steamboat Capital, a hedge fund with $290 million of stock, recently stated that Tenet is forcing the Street to realize its value by selling a number of its hospitals. The hedge fund believes that THC stock may double.

The forward price-earnings ratio of THC stock is a low 15.65 times, while its price/sales ratio is an extraordinarily attractive 0.61.

Phatom Pharmaceuticals (PHAT)

pharmaceutical industry. Production line machine conveyor with glass bottles ampoules at factory

Source: Dmitry Kalinovsky / Shutterstock.com

Phatom’s (NASDAQ:PHAT) drug, Voquenza, was approved by the Food and Drug Administration as an erosive gastroesophageal reflux disease (GERD) treatment. The agency will soon decide whether to also approve Voquenza for use by patients with non-erosive GERD.

The FDA would not have approved Voquenza for use by erosive GERD patients if the drug was not safe and an effective treatment for the disorder. This bodes well for approval of the drug for those with non-erosive GERD. And such an approval would make Phatom a prime takeover target for a large drugmaker.

Trading with a market capitalization of $591 million, PHAT stock is extremely attractive at its current levels. As a result, it’s one of the best healthcare stocks to buy now.

On the date of publication, Larry Ramer held a long position in BNGO. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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

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