In this article, we discuss the 10 best cancer stocks to buy now.
The global oncology pharmaceutical market experienced a tailwind amid the COVID-19 pandemic. Cancer revenue grew last year fueled by continued cancer care globally. According to S&P Global Market Intelligence, the top cancer pharmaceutical companies made a combined revenue of $61.2 billion in 2020. In separate data, the global spending on cancer drugs in 2020 grew 14.3% over the last five years to $164 billion. Some of the leading big pharma companies that saw an increase in revenue in their cancer drugs in 2020 include Merck & Co., Inc. (NYSE:MRK), Bristol-Myers Squibb Company (NYSE:BMY), Pfizer Inc. (NYSE:PFE), and Johnson & Johnson (NYSE:JNJ).
The global spending on cancer care is projected to reach $200 billion by 2022, according to PwC.
Big pharma-backed startups are also getting into the growing market of advanced cancer therapies. Immunitas Therapeutics recently raised $58 million in its Series B funding in August. The immuno-oncology company is backed by Novartis AG (NYSE:NVS). The company is working on single-cell genomics cancer therapies. The startup plans to get its lead single-cell analysis program into the clinic in 2022.
Investors reaped the gains in the oncology pharmaceutical market in the previous year. For example, the iShares Biotechnology ETF (NASDAQ:IBB), which tracks major healthcare companies involved in cancer drug development, has returned 16.4% to investors over the last year.
Photo by National Cancer Institute on Unsplash
Our Methodology
Here is our list of the 10 best cancer stocks to buy now. We included the biggest pharmaceutical companies with a strong cancer portfolio. These cancer stocks have positive analyst ratings and long-term growth catalysts.
We ranked the list based on the number of hedge funds having stakes in each firm as of the second quarter.
Why pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let’s take a look at the 10 best cancer stocks to buy now.
Best Cancer Stocks To Buy Now
10. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge Fund Holders: 48
Regeneron Pharmaceuticals, Inc.’s (NASDAQ:REGN) immunotherapy, Libtayo, brought in $78 million in Q2 2021, up from $63 million in Q2 2020. The company’s total revenue in the second quarter was $5.14 billion, an increase of 163% year over year. Regeneron Pharmaceuticals, Inc.’s (NASDAQ:REGN) is one of the best cancer stocks to buy now.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) submitted a supplemental Biologics License Application to the FDA in September for Libtayo, which is scheduled for approval by the end of January 2022. Shares of the biotech stock climbed 18.5% year to date.
The New York-based biotech company is co-developing an inflammatory drug, Dupixent, with Sanofi. H.C. Wainwright analyst Michael King is bullish on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) after the company announced positive data on a late-stage trial for Dupixent. On October 25, Michael King reiterated a Buy rating on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) and increased his price target for the stock to $842 from $831.
Harris Associates is the company’s largest shareholder, with shares worth $807 million. Overall, 48 hedge funds tracked by Insider Monkey have stakes in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) in Q2 2021, up from 39 in the previous quarter.
In the Q2 2021 investor letter of Oakmark Funds, the fund mentioned Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), and discussed its stance on the firm. Here is what the fund said:
“We restored Regeneron Pharmaceuticals from a rather trivial to a more normal position size. You may recall Regeneron performed well for the Fund during the Covid-19 crisis, so we significantly reduced our position as its price-value gap narrowed. During the past several quarters, however, the market has experienced the now infamous “reopening trade,” in which companies that performed well during the pandemic trailed as the economy reopened. Regeneron suffered a similar fate and its shares have lagged the S&P 500 by roughly 4000 basis points, despite the company’s strong fundamentals and robust pipeline of new products. The underperformance widened Regeneron’s price-value gap, so we restored it to a more normal position size.”
9. Illumina, Inc. (NASDAQ:ILMN)
Number of Hedge Fund Holders: 51
Illumina, Inc. (NASDAQ:ILMN) manufactures next-generation sequencing (NGS) systems for cancer genomics studies. The California-based company serves clients globally and it ranks ninth in our list of 10 best cancer stocks to buy now.
At the end of June, 51 funds out of the 873 tracked by Insider Monkey had stakes in the company, compared to 52 in the previous quarter.
In August, Illumina, Inc. (NASDAQ:ILMN) closed its $8 billion merger with GRAIL, a cancer screening company. GRAIL works as a wholly-owned subsidiary of Illumina, Inc. (NASDAQ:ILMN) and plans to seek full FDA approval for its Galleri test in 2023.
On October 14, Cowen analyst Dan Brennan kept an Outperform rating on Illumina, Inc. (NASDAQ:ILMN) with a price target of $550 per share. The stock returned 10.6% year to date.
8. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 53
Ranking eighth in our list of 10 best cancer stocks to buy now is Amgen Inc. (NASDAQ:AMGN), a multinational pharmaceutical company with a presence in over 100 countries. The California-based pharmaceutical giant is currently developing 11 investigational cancer modalities. In May 2021, Amgen Inc. (NASDAQ:AMGN) received FDA approval for its lung cancer drug, Lumakras.
The company’s revenue in the second quarter grew 5% year over year to $6.5 billion. The pharmaceutical stock returned 257% in the last decade. Additionally, Amgen Inc. (NASDAQ:AMGN) is a good investment option for income investors as it offers a dividend yield of 3.36%.
New York-based Two Sigma Advisors is the biggest stakeholder of Amgen Inc. (NASDAQ:AMGN) in the second quarter with 1.28 million shares worth $312 million.
Christopher Raymond of Piper Sandler maintained an Overweight rating on Amgen Inc. (NASDAQ:AMGN) with a price target of $255 on October 4.
Like Merck & Co., Inc. (NYSE:MRK), Bristol-Myers Squibb Company (NYSE:BMY), Pfizer Inc. (NYSE:PFE), and Johnson & Johnson (NYSE:JNJ), Amgen Inc. (NASDAQ:AMGN) is a notable pharmaceutical company offering cancer treatment.
7. Gilead Sciences, Inc. (NASDAQ:GILD)
Number of Hedge Fund Holders: 54
Gilead Sciences, Inc. (NASDAQ:GILD), which ranks seventh on the list of 10 best cancer stocks, recently had its HIV drug approved by the FDA. In October, Biktarvy was authorized for pediatric use. The stock gained 15.4% year to date.
The pharmaceutical company’s revenue in the second quarter grew 21% to $6.2 billion. One of the major revenue drivers in the quarter was the company’s breast cancer drug, Trodelvy. The cancer drug contributed $89 million to the company’s total sales in the second quarter.
New York-based investment bank Cowen resumed coverage of Gilead Sciences, Inc. (NASDAQ:GILD) on October 19 with an Outperform rating and a $76.23 price target.
Of the 873 elite funds tracked by Insider Monkey, 54 were long Gilead Sciences, Inc. (NASDAQ:GILD) at the end of June, up from 65 in the first quarter of 2021.
Gilead Sciences, Inc. (NASDAQ:GILD), along with Merck & Co., Inc. (NYSE:MRK), Bristol-Myers Squibb Company (NYSE:BMY), Pfizer Inc. (NYSE:PFE), and Johnson & Johnson (NYSE:JNJ), is one of the biggest healthcare companies developing cancer pharmaceuticals in 2021.
6. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 64
Eli Lilly and Company (NYSE:LLY) boasts over 50 years of experience in cancer drug development and it ranks sixth on the list of 10 best cancer stocks to buy now. Eli Lilly and Company (NYSE:LLY) owns a portfolio of 11 potential cancer drugs. As of July 30, the company has two cancer drugs under regulatory review.
In October, Eli Lilly and Company (NYSE:LLY) received FDA approval for its new breast cancer treatment Verzenio. Eli Lilly and Company (NYSE:LLY) recorded a 43% revenue growth for Verzenio in the third quarter, bringing in $335.5 million to the company’s total sales. The company’s revenue in the third quarter came in at $6.8 billion, representing an 18% year-over-year growth.
On October 11, Berenberg analyst Kerry Holford upgraded Eli Lilly and Company (NYSE:LLY) to Buy from Hold. The analyst increased his price target for the stock to $270 from $240 due to the pipeline progress. The stock gained 72% in the past twelve months.
Eli Lilly and Company (NYSE:LLY) is a suitable option for income investors as the company pays an annual dividend of $3.40 per share.
As of the end of the second quarter, 64 hedge funds tracked by Insider Monkey reported owning stakes in Eli Lilly and Company (NYSE:LLY). The total worth of these stakes is $2.99 billion.
5. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 67
Pfizer Inc. (NYSE:PFE) is a New York-based pharmaceutical giant. In 2020, the company’s breast cancer drug, Ibrance, generated $5.39 billion in sales. In the second quarter of 2021, the drugmaker’s revenue in the cancer segment grew 19% year over year to $3.15 billion. And with over 32 cancer drug pipelines, Pfizer Inc. (NYSE:PFE) is one of the 10 best cancer stocks to buy now.
On October 12, Matthew Harrison of Morgan Stanley increased his price target for Pfizer Inc. (NYSE:PFE) to $48 from $45, while maintaining an Equal-Weight rating. In September, the drug manufacturer declared a quarterly dividend of $0.39 per share. Pfizer Inc. (NYSE:PFE) offers a forward dividend yield of 3.55%.
Of the 873 elite funds tracked by Insider Monkey, 67 hedge funds were long Pfizer Inc. (NYSE:PFE) in Q2 2021, compared with 65 in the previous quarter.
Pfizer Inc. (NYSE:PFE) shares are up 17.2% year to date after the FDA recommended approval of the drugmaker’s COVID-19 vaccine for children. The FDA approved Pfizer Inc.’s (NYSE:PFE) COVID-19 booster shot in September.
4. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 73
Bristol-Myers Squibb Company (NYSE:BMY) is a good investment option for income investors as the healthcare company offers a dividend yield of 3.40%. In the second quarter of 2021, the company’s revenue came in at $11.7 billion, beating estimates by $100 million. In Q2, the company’s leading cancer drugs, Revlimid and Opdivo, brought in $3.2 billion and $1.91 billion.
At the end of June, 73 funds out of the 873 tracked by Insider Monkey had stakes in the company, compared to 81 in the previous quarter.
The New York-based pharmaceutical company is one of the best cancer stocks to buy now. On October 25, Citi analyst Andrew Baum maintained a Buy rating on Bristol-Myers Squibb Company (NYSE:BMY) with a price target of $75 per share.
3. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 79
Merck & Co., Inc. (NYSE:MRK) is the manufacturer of the most profitable cancer drug in the world, Keytruda. In 2020, Keytruda generated worldwide revenue of $14.38 billion, making Merck & Co., Inc. (NYSE:MRK) one of the best cancer stocks to buy now. In the second quarter of 2021, the drugmaker’s revenue from Keytruda grew 23% to $4.2 billion. The company’s total revenue in Q2 increased 23% year over year to $11.4 billion.
On October 1, Merck & Co., Inc. (NYSE:MRK) shares climbed nearly 10% following positive sentiments about the company’s COVID-19 pill, Molnupiravir.
On October 22, analyst Daina Graybosch of SVB Leerink maintained an Outperform rating on Merck & Co., Inc. (NYSE:MRK). The analyst increased her price target for the stock to $105 from $104.
Fisher Asset Management is the biggest stakeholder of the company as of the second quarter, with an $802 million stake. Overall, 79 funds of the 873 elite funds tracked by Insider Monkey reported owning stakes in the New Jersey-based company at the end of June 2021.
In its Q1 2021 investor letter, Artisan Partners mentioned Merck & Co., Inc. (NYSE:MRK), and shared their insights on the company. Here is what the fund said:
“In Q1, we initiated a position in Merck, a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. We purchased Merck when the stock came under pressure in part on concerns that the newly minted Biden administration could implement regulatory changes and lower drug costs in the pharmaceutical industry. Recent, but anticipated changes to Merck’s management team have also weighed on shares, as have concerns over the company’s heavy reliance on immunotherapy treatment Keytruda. Notably, Merck is not getting much credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future partnerships and acquisitions. While Merck is undergoing a period of transition, we think the company’s fundamentals are strong and believe changes to management should be a catalyst for improvement.”
2. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 82
AbbVie Inc. (NYSE:ABBV) is the second-best cancer stock to buy now with $1.82 billion revenue from its hematologic oncology segment in Q2 2021. The company’s cancer drug, Imbruvica, contributed $1.38 billion to the total revenue. Overall, AbbVie Inc.’s (NYSE:ABBV) revenue in the second quarter came in at $13.9 billion, an increase of 33.9% year over year.
AbbVie Inc. (NYSE:ABBV) is a dividend aristocrat that increased its dividend payment for the last 49 years. The company offers a high dividend yield of 4.76%. Shares of AbbVie Inc. (NYSE:ABBV) increased 29% in the past twelve months.
As of the end of the second quarter, 82 hedge funds tracked by Insider Monkey reported owning stakes in AbbVie Inc. (NYSE:ABBV). The total worth of these stakes is $5.35 billion.
1. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 88
Johnson & Johnson (NYSE:JNJ) operates a strong cancer pharmaceutical segment and it tops our list of 10 best cancer stocks to buy now. In the second quarter of 2021, the company’s revenue in the pharmaceutical segment grew 13.8% year over year to $12.9 billion. One of the revenue drivers in the quarter was Johnson & Johnson’s (NYSE:JNJ) leading cancer medicine, Darzalex.
On October 20, Raymond James analyst Jayson Bedford maintained an Outperform rating on Johnson & Johnson (NYSE:JNJ). The analyst set a price target of $178 per share. The stock gained 13% in the past twelve months.
Fundsmith LLP is the biggest stakeholder of the company as of the second quarter, with a $1.18 billion stake. Overall, 88 funds of the 873 elite funds tracked by Insider Monkey reported owning stakes in Johnson & Johnson (NYSE:JNJ) at the end of June 2021.
In the Q2 2021 investor letter of Distillate Capital, the fund mentioned Johnson & Johnson (NYSE:JNJ) and discussed its stance on the firm. Here is what the fund said:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
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Disclosure. None. 10 Best Cancer Stocks To Buy Now is originally published on Insider Monkey.
