In this article, we will take a look at the 12 high growth healthcare stocks to buy.
The healthcare sector proved its mettle in 2022. When the broader stock market was in turmoil, major healthcare companies, including Cardinal Health, McKesson and AmerisourceBergen, performed really well. Investors flocked to healthcare stocks in 2022 as they are considered defensive. Big, stable healthcare companies that also pay dividends and have reduced risks were among the investors’ favorites. They stayed away from small companies in the sector that are working on ambitious drugs with promising results in the long term. Investors avoided these companies amid short-term risks stemming from recession warnings.
However, long-term investors tend to bet on high growth companies that are working on blockbuster products with strong production. Sooner or later the market is going to turn the corner. When it does, investors who had a long-term horizon in their investment decisions will come out as winners.
The healthcare industry is defined by growth. Money will always be poured into the industry as ageing population, new diseases and new technologies continue to fuel demand. The healthcare industry has several facets which will see huge investments in the future. For example, a Deloitte report estimates that the market for remote monitoring devices alone is projected to reach $101 billion in 2028 from about $30 billion in 2021. This market growth will reduce the burden on the healthcare systems since remote monitoring devices can be used to keep track of patients, assist them and give them directions remotely.
Another high-growth area in the healthcare industry is wearable devices. The Deloitte report said that by 2024, a whopping 440 million consumer health and wellness wearable devices will ship worldwide.
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Our Methodology
For this article we used the Finviz stock screener to identify healthcare companies with over 25% quarter-over-quarter sales growth and over 25% of sales growth over the past five years. We sorted the resultant dataset in descending order of the market cap and picked the top 12 stocks trading on US stock exchanges. For each stock we have mentioned its latest revenue numbers with YoY revenue growth figures.
High Growth Healthcare Stocks to Buy
12. BeiGene, Ltd. (NASDAQ:BGNE)
Number of Hedge Fund Holders: 18
BeiGene, Ltd. (NASDAQ:BGNE) ranks 12th in our list of 12 high-growth healthcare stocks to buy. BeiGene, Ltd. (NASDAQ:BGNE) is known for its cancer treatments. In November, BeiGene, Ltd. (NASDAQ:BGNE) posted its third quarter results, which showed that its revenue jumped about a whopping 88% in the period on a YoY basis to reach $387.63 million, beating estimates by $10.18 million.
Last month, it was reported that the US FDA expanded its approval for BeiGene, Ltd. (NASDAQ:BGNE)’s drug Brukinsa (zanubrutinib) to include chronic lymphocytic leukemia and small lymphocytic lymphoma.
The drug is already approved for Waldenström’s macroglobulinemia, marginal zone lymphoma, and mantle cell lymphoma.
A total of 18 hedge funds tracked by Insider Monkey reported owning stakes in BeiGene, Ltd. (NASDAQ:BGNE) as of the end of the third quarter of 2022, up from 14 hedge funds in the previous quarter.
11. ICU Medical, Inc. (NASDAQ:ICUI)
Number of Hedge Fund Holders: 18
California-based medical technologies developer ICU Medical, Inc. (NASDAQ:ICUI) ranks 11th in our list of high growth healthcare stocks to buy. In November, ICU Medical, Inc. (NASDAQ:ICUI) posted third quarter results. Revenue in the period jumped about 78% on a YoY basis to reach $597.9 million. Adjusted EPS in the quarter came in at $1.75.
However, the stock was downgraded to Market Perform from Outperform by Raymond James. The firm cited FX headwinds and supply-chain related costs for the bearish call.
A total of 18 hedge funds tracked by Insider Monkey reported owning stakes in ICU Medical, Inc. (NASDAQ:ICUI) as of the end of the third quarter of 2022. The total value of these stakes during this period was $140 million. The biggest stakeholder of ICU Medical, Inc. (NASDAQ:ICUI) was Seth Rosen’s Nitorum Capital which owns a $38.1 million stake in the company.
10. Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR)
Number of Hedge Fund Holders: 25
Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) makes RNA-based treatments. Earlier this month, Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) posted its fiscal first quarter revenue of 2023. Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR)’s revenue in the quarter jumped about 128% YoY. Revenue growth was fueled y milestone payments from Amgen (AMGN) and Horizon Therapeutics (HZNP).
Recently, Johnson & Johnson’s Janssen unit relinquished rights to a RNAi candidate for non-alcoholic steatohepatitis (NASH) and gave them over to Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR).
As of the end of the third quarter of 2022, 25 hedge funds out of the 920 funds tracked by Insider Monkey reported owning stakes in Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR). The total value of these stakes was over $207 million. The biggest stakeholder of Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) during this period was David Witzke and Michael Gregory’s Avidity Partners Management which owns a $41.5 million stake in the company.
9. PTC Therapeutics, Inc. (NASDAQ:PTCT)
Number of Hedge Fund Holders: 26
New Jersey-based PTC Therapeutics, Inc. (NASDAQ:PTCT) makes orally administered small molecule drugs and gene therapy. During the third quarter PTC Therapeutics, Inc. (NASDAQ:PTCT) posted revenue growth of about 57% on a YoY basis. GAAP EPS in the quarter came in at -$1.53, missing estimates by $0.24. In October, PTC Therapeutics, Inc. (NASDAQ:PTCT) announced that it would receive up to $1 billion in funding from Blackstone (NYSE:BX) affiliates to support the development of its pipeline.
8. Medpace Holdings, Inc. (NASDAQ:MEDP)
Number of Hedge Fund Holders: 28
Ohio-based clinical research company Medpace Holdings, Inc. (NASDAQ:MEDP) ranks 8th in our list of high growth healthcare stocks to buy. Earlier in February Medpace Holdings, Inc. (NASDAQ:MEDP) posted its fourth quarter results. Medpace Holdings, Inc. (NASDAQ:MEDP)’s revenue in the period increased by 28% in the period on a YoY basis to reach $394.1 million, beating estimates by $8.01 million. GAAP EPS in the quarter came in at $2.12, beating estimates by $0.33.
Medpace Holdings, Inc. (NASDAQ:MEDP) said its EBITDA in the fourth quarter came in at $80.4 million, which shows an increase of about 31% from comparable period last year.
At the end of the third quarter of 2022, 28 hedge funds in Insider Monkey’s database had stakes in Medpace Holdings, Inc. (NASDAQ:MEDP). The total value of these stakes was $310.1 million. The biggest stakeholder of Medpace Holdings, Inc. (NASDAQ:MEDP) during this period was Greg Poole’s Echo Street Capital Management which owns a stake worth about $102 million in the company.
Vulcan Value Partners made the following comment about Medpace Holdings, Inc. (NASDAQ:MEDP) in its Q4 2022 investor letter:
“Medpace Holdings, Inc. (NASDAQ:MEDP) is a Clinical Contract Research Organization. Throughout 2022, Medpace’s stock was highly volatile as potential concerns around the financial health of its clients were called into question. We evaluated these risks, and they are reflected in our value estimates. With our estimate of value remaining stable and volatile share price throughout the year, we were able to take advantage of that volatility on two occasions in 2022. First, we purchased more shares as the stock sold off in early 2022, and more recently in October we trimmed our position when the stock rose nearly 40% in a day in response to its earnings. We also have a high opinion of Medpace’s management team which was opportunistic in taking advantage of the volatility in its shares last year. In the nine months ended September 2022, Medpace repurchased more than 15% of its shares outstanding, at prices well below our estimate of its value. Last October, the company announced a new $500 million share repurchase authorization. We are pleased to see the company choose to deploy its free cash flow in this manner.”
7. QuidelOrtho Corporation (NASDAQ:QDEL)
Number of Hedge Fund Holders: 29
Diagnostics products company QuidelOrtho Corporation (NASDAQ:QDEL)’s revenue in the last quarter of 2022 jumped by about 36% YoY to total $866.5 million, easily beating estimates by $90.69 million. Adjusted EPS in the quarter came in at $1.76, beating estimates by $0.34. During the Q4 earnings call, QuidelOrtho Corporation (NASDAQ:QDEL)’s management said that it is confident that QuidelOrtho will be able to post high-single-digit revenue growth over the long term.
As of the end of the third quarter of 2022, 29 hedge funds reported owning stakes in QuidelOrtho Corporation (NASDAQ:QDEL), according to Insider Monkey’s database of 920 hedge funds. This was a sharp decline from 37 hedge funds having stakes in the company in the previous quarter.
Meridian Funds made the following comment about QuidelOrtho Corporation (NASDAQ:QDEL) in its Q3 2022 investor letter:
“QuidelOrtho Corporation (NASDAQ:QDEL) is a global leader in the diagnostics industry. The merger of Quidel and Ortho Clinical Diagnostics has resulted in a top 10 player in the in-vitro diagnostics industry, combining Quidel’s strong point of care platform with Ortho’s blood chemistry and transfusion platform. We believe the new company will be much more consistent in its ability to deliver steady top-line growth at attractive margins to fuel free cash flow growth. Further boosting our conviction in QuidelOrtho is its robust product pipeline. Pipeline developments include the company’s Savanna platform, which solves a long-term need for near-patient molecular testing that is accurate, fast, and economical. We believe the stock weakness is due to the anticipated decline in COVID-19 testing. However, we believe the long-term earnings and free cash flow profile are underappreciated, and as a result we increased our position in the stock.”
6. Progyny, Inc. (NASDAQ:PGNY)
Number of Hedge Fund Holders: 29
Shares of fertility benefits company Progyny, Inc. (NASDAQ:PGNY) jumped in November after the company posted its Q3 results. Revenue in the quarter jumped about 68% on a YoY basis to reach $205.4 million, beating estimates by $10.96 million. For full-year 2022 Progyny, Inc. (NASDAQ:PGNY) was expecting its revenue to come in between $775 million to $785 million, while the Wall Street consensus was $767.34 million.
Polen Capital made the following comment about Progyny, Inc. (NASDAQ:PGNY) in its Q4 2022 investor letter:
“Finally, Progyny, Inc. (NASDAQ:PGNY), a leading provider of fertility benefits to self-insured companies, underperformed in the quarter despite reporting robust results due to concerns about the short-term outlook with elevated tech layoffs. We feel these concerns are overstated and fail to appreciate Progyny’s nascent opportunity to penetrate a large and rapidly growing market with an advantaged, “patient-first” business model. Progyny’s comprehensive fertility solutions are top of mind for employers looking to drive better diversity, equity, and inclusion efforts and to attract and retain talent.”
5. Intra-Cellular Therapies, Inc. (NASDAQ:ITCI)
Number of Hedge Fund Holders: 31
Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) is one of the high growth healthcare companies that is working on treatments for neuropsychiatric and neurologic disorders. In November 2022 Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) posted stellar Q4 results which showed huge revenue growth. Intra-Cellular Therapies, Inc. (NASDAQ:ITCI)’s revenue in the September quarter jumped about 220% on a YoY basis to total $71.9 million, beating estimates by $5.9 million. During the period, Intra-Cellular Therapies, Inc. (NASDAQ:ITCI)’s bipolar depression treatment Caplyta saw its sales rise about 230% on a YoY basis.
Intra-Cellular Therapies, Inc. (NASDAQ:ITCI)’s cash, cash equivalents, restricted cash and investment securities totaled $630.5 million as of the end of September. GAAP EPS in the period came in at -$0.57, beating estimates by $0.25.
At the end of the September quarter of 2022, 31 hedge funds had stakes in Intra-Cellular Therapies, Inc. (NASDAQ:ITCI). The total value of these stakes during this period was $493 million. The biggest stakeholder of Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) during this period was Israel Englander’s Millennium Management which owns an $86 million stake in the company.
TimesSquare Capital made the following comment about Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) in its Q3 2022 investor letter:
“Slipping by -18% was Intra-Cellular Therapies, Inc. (NASDAQ:ITCI), which develops small molecule treatments for neurological disorders. The company reported revenues that were better than expected, though earnings were lower. There was an acceleration of sales for Caplyta, a treatment for schizophrenia and bipolar depression. However, some investors appeared concerned that as Caplyta volumes increased to a higher level that the rate of growth will slow. We view the projected growth trajectory positively, as well as Caplyta’s potential for use in other indications, so we added to our position.”
4. Evolent Health, Inc. (NYSE:EVH)
Number of Hedge Fund Holders: 32
Healthcare solutions provider Evolent Health, Inc. (NYSE:EVH) is one of the high growth healthcare stocks right now. During the third quarter Evolent Health, Inc. (NYSE:EVH)’s revenue increased by 58.5% on a YoY basis to reach $352.6 million, missing estimates by $4.18 million. Adjusted EPS in the quarter came in at $0.59, beating estimates by $0.49.
Evolent Health, Inc. (NYSE:EVH) said that it expects its Q4 revenue in the range of $361 million to $381 million, versus the consensus estimate of $376.16 million. Adjusted EBITDA was expected in the range of $24 million to $29 million.
In January Evolent Health, Inc. (NYSE:EVH) jumped after the company announced expansion of its partnership with Humana in oncology.
Carillon Eagle Small Cap Growth Fund made the following comment about Evolent Health, Inc. (NYSE:EVH) in its Q4 2022 investor letter:
“Evolent Health, Inc. (NYSE:EVH) provides a platform of technology-enabled administrative and clinical management services to provider networks and managed care organizations to help them manage the care of patients under value-based care (VBC) arrangements. Unfortunately in the quarter, the company missed revenue estimates due to a retroactive adjustment resulting from the way that the Centers for Medicare and Medicaid Services calculates savings for companies participating in gainsharing pilot programs with them. While this was disappointing, later in the quarter the company announced an accretive acquisition of a specialty benefit management organization that focuses on managing costs and quality in radiology, musculoskeletal medicine, physical medicine, and genetics. The announcement of this acquisition was favorably received by investors, and when combined with recent impressive new client additions, sets the company up for what should be a strong 2023.”
3. Inspire Medical Systems, Inc. (NYSE:INSP)
Number of Hedge Fund Holders: 37
Inspire Medical Systems, Inc. (NYSE:INSP) is a Minnesota-based company that is working in the sleep apnea domain. Over the past 12 months Inspire Medical Systems, Inc. (NYSE:INSP) has gained about 22%. Earlier this month Inspire Medical Systems, Inc. (NYSE:INSP) posted its fourth quarter results. Revenue in the quarter jumped about 76% on a YoY basis to total $137.9 million, beating estimates by $0.15 million. GAAP EPS in the period came in at $0.10, beating estimates by $0.68. For full-year 2023 it expects its revenue to come in the range of $560 million to $570 million, versus the consensus estimate of $545.71 million.
In December, KeyBanc analyst Matthew Mishan started covering Inspire Medical Systems, Inc. (NYSE:INSP) with an Overweight rating and a $287 price target. The analyst believes Inspire Medical Systems, Inc. (NYSE:INSP) is operating in an underpenetrated market and has the potential to beat revenue growth estimates.
Baron Small Cap Fund made the following comment about Inspire Medical Systems, Inc. (NYSE:INSP) in its Q4 2022 investor letter:
“Inspire Medical Systems, Inc. (NYSE:INSP) sells an implantable device that treats sleep apnea. Revenues grew an astounding 77% in the quarter, way ahead of expectations, and the stock popped. We believe Inspire sells a unique product that has great advantages to CPAP devices, the dominant therapy, and is gaining significant market share. Management is executing on all frontsdriving awareness through effective advertising, increasing procedures at existing centers, and adding new centers. They are also continuing to innovate. This quarter a new Bluetooth remote control device was introduced. The next generation device will come out in mid-2023, and we expect approval of new indications, which will expand the available market. We expect revenues to continue to grow rapidly, with sales potential well over $2 billion, which is five-fold higher than current revenue. We believe the company will be profitable in 2023 and margins will be high over time.”
2. Neurocrine Biosciences, Inc. (NASDAQ:NBIX)
Number of Hedge Fund Holders: 44
California-based Neurocrine Biosciences, Inc. (NASDAQ:NBIX) ranks 2nd in our list of 12 high growth healthcare stocks to buy. Neurocrine Biosciences, Inc. (NASDAQ:NBIX) focuses on neurological diseases. In the fourth quarter of 2022 Neurocrine Biosciences, Inc. (NASDAQ:NBIX)’s revenue jumped about 32% on a YoY basis to reach $412 million, beating estimates by $3.04 million.
Neurocrine Biosciences, Inc. (NASDAQ:NBIX)’s sales for INGREZZA during fiscal 2022 came in at $1.43 billion.
Earlier this month, Neurocrine Biosciences, Inc. (NASDAQ:NBIX) jumped after Morgan Stanley upgraded NBIX to Overweight from Equal Weight. The firm noted FDA’s approval for Ingrezza for Huntington’s disease chorea.
44 of the 920 hedge funds tracked by Insider Monkey had stakes in Neurocrine Biosciences, Inc. (NASDAQ:NBIX) at the end of the third quarter of 2022. The total value of these hedge funds’ stakes was about $1.3 billion. The biggest stakeholder of Neurocrine Biosciences, Inc. (NASDAQ:NBIX) during this period was David Witzke and Michael Gregory’s Avidity Partners Management which owned a $197.1 million stake in the company.
1. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)
Number of Hedge Fund Holders: 55
Massachusetts-based Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is involved in the discovery, development and commercialization of RNA interference therapeutics. In October, Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) posted its Q3 results, according to which its revenues jumped about 41% in the quarter on a year-over-year basis to reach $264.31 million. However, the figure missed analyst estimates. In January, Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) announced that its preliminary full year global net product revenues for its drugs Onpattro, Amvuttra, Givlaari and Oxlumo came in at $894 million. This shows a growth of about 35% on a YoY basis.
As of the end of the third quarter of 2022, 55 hedge funds in Insider Monkey’s database had stakes in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY). The total value of these stakes was over $1.1 billion.
Here is what Baron Funds specifically said about Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) in its Q3 2022 investor letter:
“We initiated a position in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), a commercial stage biopharmaceutical company which pioneered a new class of innovative medicines based on RNA interference (RNAi). This class of medicines acts by silencing the messenger RNA that encodes for the proteins that can cause disease, thereby preventing these disease-causing proteins from being made. Alnylam’s validated platform has demonstrated a higher probability of success in drug development versus the industry overall with five medicines approved in less than four years. During the quarter, the company reported positive results from its Apollo-B Phase 3 study of Patisiran in patients with ATTR Amyloidosis with Cardiomyopathy, a rare, progressively debilitating, and fatal disease caused by misfolded TTR proteins which accumulate as amyloid deposits in the heart, nerves, and GI tract. Alnylam also has multiple other late-stage medicines in the pipeline including a new blood pressure drug in Phase 2 studies that can potentially be delivered as a twice-yearly shot. Alnylam has an extensive intellectual property estate with fundamental RNAi technology, delivery, and productspecific protection, and is in a position to achieve sustainable profitability within the next few years.”
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Disclosure: None. 12 High Growth Healthcare Stocks to Buy is originally published on Insider Monkey.
