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Investing in Healthcare: What to Consider

The healthcare sector offers a wide range of investment choices. Keep reading to learn more about investing in healthcare stocks.
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Demographics, demographics, demographics. That’s always a key factor when it comes to investing, and that’s especially true when it comes to investing in healthcare stocks. An aging global population, combined with a growing middle-class market and advances in medical technology makes this sector a sound long-term investment.

Investing in Healthcare Pros

The healthcare sector offers a wide range of investment choices. These include companies focusing on:

  • Biotechnology
  • Health insurers
  • Healthcare technology
  • Hospitals
  • Life science tools
  • Medical equipment and services
  • Pharmaceuticals

As defensive stocks, this sector usually provides stable earnings not correlating to the stock market’s overall performance. Keep in mind that various industries in this sector react to market conditions based on how the particular industry is affected. For instance, COVID-19 boosted the stocks of companies developing testing and vaccines. The cancellation of elective surgeries during that period put a dent in the stock of many medical device manufacturers and for-profit hospitals.

Investing in Healthcare Cons

What’s the downside to investing in healthcare stocks? Overall, these stocks are subject to U.S. policy changes. Healthcare stocks are vulnerable to regulatory risks. When it comes to pharmaceutical stocks, an FDA recall or poor clinical trial results can affect share price severely.

There’s also the fact that the pandemic is still with us. While healthcare stocks have mostly recovered from the battering this novel event imposed, challenges still exist.

Top Healthcare Stocks

Stocks to consider when investing in healthcare include:

No. 4 Johnson & Johnson (NYSE: JNJ)

New Brunswick, New Jersey-based Johnson & Johnson calls itself “the world’s largest and most broadly-based healthcare company.” Founded in 1886, J&J products in its consumer health division include household names such as Band-Aid®, Benadryl, Motrin, Tylenol, and Zyrtec. That’s literally just naming a few. Its many subsidiaries include Janssen Pharmaceuticals, Ethicon, DePuy Synthes, McNeil Products Ltd. and Ortho-McNeil Pharmaceuticals.

For the first quarter of 2022, J&J pays a dividend of $1.06 per share. J&J is a dividend aristocrat, raising its dividends for 59 years in a row. The company experienced total sales growth of 5%, to 23.4 billion. Operational growth was 7.7% with an adjusted operational growth of 7.9%. Earnings per share of $1.93 decreased 16.8% and adjusted earnings per share of $2.67 increased 3.1%.

J&J’s consumer health sales increased 1.6% during this period. Pharmaceutical sales grew 9.3% and its MedTech sales grew 8.6%. J&J is a great stock to consider when investing in healthcare.

J&J’s coronavirus vaccine has been associated with a rare but serious blood clotting disorder. On May 6, the FDA imposed new restrictions on who may receive this vaccine. Five months earlier, the CDC decided to give preferential recommendations to the Moderna and Pfizer vaccines. The company announced it will not use the vaccine in its revenue projections.

No. 3 Teladoc Health (NYSE: TEDOC)

During the pandemic, telehealth services boomed. So did Teladoc, one of the oldest telemedicine companies in the business. Founded in 2002 in Dallas, Texas, it is the global leader in virtual care. Its brands include BetterHelp, HealthiestYou, InTouch Health, and MédecinDirect.

In the first quarter of 2022, Teladoc revenue grew 25% year-over-year (YOY), to $564.4 million. However, its net loss totaled $6,674.5 million, or $(41.58) per share. That’s compared to $199.6 million, or $(1.31) per share, in the prior year’s first quarter.

CEO Jason Gorevic warned that there are “dynamics” the company is currently experiencing in the direct-to-consumer mental health and chronic conditions market. In the former, higher advertising costs are generating a lower yield than expected in Teladoc’s marketing spending. In the latter, health plan companies are evaluating long-term strategies.

No. 2 UnitedHealth Group (NYSE: UNH)

Based in Minnetonka, Minnesota, UnitedHealth Group is a multinational managed healthcare and insurance company. It’s been dubbed “The Amazon of Healthcare.” So, when investing in healthcare, you’ll want to consider this stock. Subsidiaries include the behemoth Optum, one of the nation’s largest healthcare providers and pharmacy benefit managers. Other subsidiaries include Golden Rule Insurance Company and Oxford Health Plans.

UnitedHealth Group reported first-quarter 2022 revenues of $801 billion, growing 10 billion or 14% YOY. Both United Healthcare and Optum experienced double-digit growth. Earnings from operations were $7 billion, with cash flows from operations at $5.3 billion. In the first quarter of 2022, the operating cost ratio of 14.2% decreased from 14.6% in 2021. That decrease was due to the effects of COVID-19 as well as continued productivity advances. A total of $3.9 billion was returned to shareholders in the first quarter via dividends and share repurchases.

No. 1 Walgreens Boots Alliance (Nasdaq: WBA)

A global retail pharmacy leader, the Walgreen Boots Alliance, Inc. owns the Walgreens retail pharmacy chains in the U.S. and Boots in the U.K. In the U.S., WBA also includes the Duane Reade drugstore chain. The company also has a strong presence in Latin America and Europe.

On March 31, 2022, WBA reported second-quarter 2022 results, including earnings per share of $1.02. That was down from $1.06 compared to the 2021 quarter. Second-quarter sales from continuing operations increased 3 percent over 2021’s second quarter, to $33.8 billion. That was up 3.8% on a constant currency basis. Operating income from continuing operations increased to $1.2 billion, as opposed to $832 million in the second quarter of 2021.

COVID-19 vaccinations and testing help boost U.S. retail sales by 14.7% and Boot UK sales by 22%. In the U.S., retail growth was the highest in 20 years. To date, the company has administered 62.8 million COVID-19 vaccinations. It is the largest pediatric vaccine provider among pharmacies.

In late April 2022, WBA announced a quarterly dividend of $.47.75 cents per share, up 2.1% from the first quarter of 2021.

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Modified mRNA Demonstrates 10-Fold Protein Production

Scientists at Hong Kong University of Science and Technology came up with a technique to increase the efficiency and potentially the efficacy of mRNA therapeutics….

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Scientists at Hong Kong University of Science and Technology came up with a technique to increase the efficiency and potentially the efficacy of mRNA therapeutics. mRNA molecules have what is called a poly-A tail, which is basically a string of adenine nucleotides at one end. These researchers discovered that by replacing some of these nucleotides in the mRNA tail with cytidine, a cytosine base with a ribose sugar attached, that they could enhance the resulting protein production of the mRNA and increase its stability and life-span. The technique could lead to more effective mRNA therapies and vaccines, potentially enabling clinicians to achieve similar or better effects with smaller doses.

mRNA therapies have come a long way in just the last few years. The COVID-19 pandemic has propelled this approach from an emerging technology to a mainstay of our vaccine response. The concept is elegant – deliver mRNA strands to the patient, and allow their own cellular machinery to produce the relevant protein that the strands code for. So far, so good – the approach, once considered unrealistic because of the fragility of mRNA, has proven to work very well, at least for COVID-19 vaccines.  

However, there is always room for improvement. One of the issues with current mRNA therapies is that they can require multiple rounds of dosing to create enough of the therapeutic protein to achieve the desired effect. Think of the multiple injections required for the COVID-19 vaccines. Creating mRNA therapies that can induce our cells to produce more protein would certainly be beneficial.

To address this limitation, these researchers have found a way to modify the poly-A tail of synthetic mRNA strands. They found that by replacing some of the adenosine in the mRNA tail with cytidine, they could drastically increase the amount of protein the resulting strands ended up producing when applied to human cells and in mice. This translated to 3-10 times as much protein when compared with unmodified mRNA.

The researchers hope that the approach can enhance the effectiveness and required dosing schedules for mRNA therapies.

“Increasing the protein production of synthetic mRNA is generally beneficial to all mRNA drugs and vaccines,” said Becki Kuang, a researcher involved in the study. “In collaboration with Sun Yat-Sen University, our team is now exploring the use of optimized tails for mRNA cancer vaccines on animal. We are also looking forward to collaborating with pharmaceutical companies to transfer this invention onto mRNA therapeutics and vaccines’ development pipelines to benefit society.”

See a short animation about the technology below.

Study in journal Molecular Therapy – Nucleic Acids: Cytidine-containing tails robustly enhance and prolong protein production of synthetic mRNA in cell and in vivo

Via: Hong Kong University of Science and Technology

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International

LIV Golf Expands to Courses Used By PGA Tour

LIV Golf announced three new venues to its 2023 calendar.
The post LIV Golf Expands to Courses Used By PGA Tour appeared first on Front Office Sports.

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LIV Golf is pushing further into the PGA Tour’s turf.

The Saudi Arabia-backed league announced three new venues for its 2023 season, all of which are used regularly by the PGA Tour or DP World Tour.

  • In February, LIV Golf will come to El Camaleón in Mexico’s Mayakoba resort area. The course, designed by Greg Norman prior to his role as LIV Golf CEO, was the PGA Tour’s first course in Latin America.
  • In April, LIV will travel to Sentosa in Singapore, which has hosted the Singapore Open.
  • In June, the tour will make its trip to Spain’s Real Club Valderrama, whose history includes the Ryder Cup and DP World Tour events.

LIV is also adding The Grange Golf Club in Adelaide, Australia, as it grows to 14 events next year.

The PGA Tour, which is under investigation by the Justice Department over antitrust concerns, hired lobbyist and major Republican fundraiser Jeff Miller to improve its standing in Washington.

PGA Tour Hires Top Republican Strategist Amid LIV Golf Clash

The PGA Tour could be seeking help on the antitrust front.
December 1, 2022

Bank Shots

LIV golfers Phil Mickelson and Sergio Garcia responded to Tiger Woods after the latter called for Norman’s ouster due to his pugilistic stance toward the PGA Tour.

“Greg Norman is our CEO, and we support him,” said Garcia. “We all wish we could come to an agreement. There are people who could have done wrong in both places, but it seems that there are only bad guys on one side.”

Mickelson responded to a comment by Woods that the PGA Tour had to take out a huge loan to survive past the pandemic by tweeting out financial information from the Tour’s public documents.

The post LIV Golf Expands to Courses Used By PGA Tour appeared first on Front Office Sports.

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XPeng stock rises 48% from a double-bottom pattern. Should you buy it?

Shares of XPeng Inc. (NYSE:XPEV) rose 48% on Thursday premarket after promising delivery outlook. XPeng posted 5,811 electric vehicle deliveries in November….

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Shares of XPeng Inc. (NYSE:XPEV) rose 48% on Thursday premarket after promising delivery outlook. XPeng posted 5,811 electric vehicle deliveries in November. Despite the number falling 63% from the prior year, it increased 14% from October. The increase in deliveries reflected the easing of Covid-19 rules, which have hit EV makers in China this year.

XPeng said it expects the deliveries to rise significantly in December 2022. The deliveries will be boosted by a ramp-up in the production of G9s. Analysts project up to 10,000 deliveries in December. The delivery outlook overshadowed a reported Q3 loss of $0.39. XPeng’s revenue, however, rose 19.3% to $959.2 million or £786 million. The positive stock market news and outlook boosted the outlook for XPEV, which is already down 80% YTD.

XPEV recovers above the MA amid a bullish RSI divergence

XPEV Chart by TradingView

On the daily chart, XPEV recovered above the 20-day and 50-day moving averages. It is for the first time that the stock is recovering above the moving averages since July. 

XPEV is also recovering from a double bottom that formed close to $6.2. A bullish RSI divergence also occurred towards $6.2. The level could prove to be the bottom price if XPEV maintains the recovery. The RSI reading of 60 indicates that XPEV is yet to reach overbought levels.

How attractive is XPEV?

This article finds investing in XPEV favourable in the short term. With the deliveries and outlook, XPEV could continue to rise. The levels around $12 and $14 should be watched.

It should be noted that Chinese car sales tend to pick up towards the end of the year. So, it is possible for XPEV to maintain gains in the medium term, with the expectation.

However, we consider the greater stock market risks still high. China also still needs to ease its strict Covid-19 policy further, and it could weigh the automakers.

The post XPeng stock rises 48% from a double-bottom pattern. Should you buy it? appeared first on Invezz.

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