5 Best Medical Stocks to Invest In

4. Abbott Laboratories (NYSE: ABT)

Market Cap: $200.6 billion
Number of Hedge Fund Holders: 65 

Abbott Laboratories (NYSE: ABT) is an American multinational medical company, which has operations in medical devices, diagnostics, and pharmaceuticals. The company has more than 109,000 employees, working in over 160 countries. It ranks fourth on our list of the best medical stocks to invest in. 

In Q1 2021, Abbott Laboratories (NYSE: ABT) generated over $10.4 billion in revenue, up from $7.7 billion during the same period last year. The EPS stood at $1.32, beating the market estimate of $1.27. The diagnostic sector accounted for over $4.0 billion of the whole revenue, and the medical devices made $3.3 billion in sales. Abbott Laboratories (NYSE: ABT) expects the Covid-related revenue to reach over $4 billion due to its antigen-based Covid test, BinaxNow, which is approved by FDA. 

BTIG, earlier in June, raised a price target on ABT stock to $140, rating the stock as a ‘Buy’. At the end of Q1 2021, 65 hedge funds have positions in Abbott Laboratories (NYSE: ABT), worth $5.1 billion. 

Polen Capital, an investment management firm, has released its Q1 2021 investor letter and has mentioned Abbott Laboratories (NYSE: ABT) with other stocks. Here is what the firm has to say: 

“Abbott Laboratories developed and commercialized multiple COVID tests during 2020, delivering a double-digit performance in what could have otherwise been a very challenging year. Management expects earnings per share to grow more than 30% in 2021. We believe it is poised to sustainably deliver double-digit earnings per share growth even as COVID testing sales decline from an expected $6.5-7.5 billion in the fiscal year 2021 to potentially as low as $300-$500 million several years from now.

We have always been believers in Abbott management’s capital allocation prowess, and we think they continue to invest prudently.

Management is taking advantage of the COVID test profits to invest roughly $2 billion into R&D and marketing to bolster growth in the core business as it recovers from the pandemic. We think there could even be a durable increase in the longer-term growth rates of both the diagnostics and medical device segments, given investments in product development and direct-to-consumer (DTC) capabilities. Testing sales created a windfall for Abbott in the near term, and management is exploiting it with what we view as sound capital allocation.

We believe the company continues to be fairly valued despite being rewarded for such favorable business momentum during the quarter.”