In this article, we discuss top 5 healthcare stocks to buy. If you want to read about some more healthcare stocks, go directly to Top 10 Healthcare Stocks to Buy.
5. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 70
Pfizer Inc. (NYSE:PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It is one of the best healthcare stocks to invest in. On August 1, investment advisory Barclays maintained an Equal Weight rating on Pfizer Inc. (NYSE:PFE) stock and raised the price target to $52 from $50. Analyst Carter Gould issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm AQR Capital Management is a leading shareholder in Pfizer Inc. (NYSE:PFE), with 10.6 million shares worth more than $553.9 million.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Pfizer Inc. (NYSE:PFE) was one of them. Here is what the fund said:
“While the level of general turnover abated as we progressed through 2021, it remained high in one area: post-COVID-19 recovery plays. The concept behind this investment thesis was, and still is, straightforward: with the advent of effective vaccines, the path from pandemic to endemic is just a matter of time. As this transition occurs, the estimated excess savings of over $2 trillion built up on U.S. consumer balance sheets will unlock dramatic pent-up demand for experiences, especially global travel. This investment case seemed especially compelling when the Pfizer Inc. (NYSE:PFE) vaccine positively surprised markets in November 2020. As a result, we made post-COVID-19 stocks (which were trading well below our estimate of recovery value) a sizable theme within the portfolio. We understood this to be a more aggressive tilt in positioning because it required a major improvement in demand to catalyze fundamentals and drive price toward higher business values. While we accepted that recovery would not be smooth and that it would take time to deploy vaccines both domestically and globally, we decided that recovery was the logical path of least resistance and we were being well compensated for these risks.”
4. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 79
Merck & Co., Inc. (NYSE:MRK) operates as a healthcare company worldwide. It is one of the top healthcare stocks to invest in. On October 5, the company announced that it had opened a new secondary packaging facility in Singapore to support production of vaccines and biologics including immunotherapies. The firm said that it had also broken ground for a new plant which will produce inhalers. This manufacturing facility is also a part of a $500 million investment project of the firm.
On September 14, Berenberg analyst Luisa Hector upgraded Merck & Co., Inc. (NYSE:MRK) stock to Buy from Hold with a price target of $100, up from $95, noting that the firm offered investors medium-term growth just ahead of the sector average and no litigation overhang.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Merck & Co., Inc. (NYSE:MRK), with 12 million shares worth more than $1.1 billion.
In its Q2 2022 investor letter, Chartwell Investment Partners, an asset management firm, highlighted a few stocks and Merck & Co., Inc. (NYSE:MRK) was one of them. Here is what the fund said:
“In the Dividend Equity accounts, the three best performers in Q2 includes Merck & Co., Inc. (NYSE:MRK), up 12.0%. Merck, like other pharma companies, is in a defensive business, but the stock also did well as peak-sales estimates for their flagship drug, Keytruda, have gone up (JPMorgan estimates $32 billion in sales by 2026).”
3. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Johnson & Johnson (NYSE:JNJ) researches and develops, manufactures, and sells various products in the healthcare field. It is one of the premier healthcare stocks to invest in. On October 10, The Janssen, a pharmaceutical company which is a subsidiary of Johnson & Johnson, revealed that more than half of patients who responded to their Sterala ulcerative colitis therapy in a phase 3 trial remained in clinical remission through four years of treatment.
On July 21, UBS analyst Kevin Caliendo maintained a Neutral rating on Johnson & Johnson (NYSE:JNJ) stock and lowered the price target to $180 from $185, noting that the macro economic slowdown had led to decreasing forward estimates for the firm.
Among the hedge funds being tracked by Insider Monkey, Florida-based firm GQG Partners is a leading shareholder in Johnson & Johnson (NYSE:JNJ), with 6.6 million shares worth more than $1.2 billion.
In its Q2 2022 investor letter, Mayar Capital, an asset management firm, highlighted a few stocks and Johnson & Johnson (NYSE:JNJ) was one of them. Here is what the fund said:
“Johnson & Johnson (NYSE:JNJ) is currently our largest position and a long-standing holding. The majority of the group’s sales comes from its collection of pharmaceutical franchises, but a large majority (~45%) comes from its collection of medical device businesses and its consumer brands.
Here’s how JNJ make and spend a dollar of revenues: As of 2021, about 55 cents of that dollar comes from its pharmaceutical sales – sales of drugs to pharmacies and distributors – while 30 cents come from the sale of medical devices, such as surgery equipment and orthopaedics. The rest of that dollar in sales comes from sales of JNJ’s consumer brands such as Listerine mouthwash, Nicorette nicotine tablets and Neutrogena cosmetics (…read more)
2. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 91
United Group Incorporated (NYSE:UNH) operates as a diversified healthcare company in the United States. It is one of the major healthcare stocks to invest in. On October 3, the company announced that it had completed the $8 billion purchase of Change Healthcare. The firm had agreed to purchase Change Healthcare for $25.75 per share in January 2021, which was changed to $27.5 per share later.
On September 22, Raymond James analyst John Ransom maintained a Strong Buy rating on UnitedHealth Group Incorporated (NYSE:UNH) stock and raised the price target to $635 from $620.
At the end of the second quarter of 2022, 91 hedge funds in the database of Insider Monkey held stakes worth $10.9 billion in United Group Incorporated (NYSE:UNH), compared to 103 in the preceding quarter worth $12.8 billion.
In its Q2 2022 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and United Group Incorporated (NYSE:UNH) was one of them. Here is what the fund said:
“UnitedHealth Group Incorporated (NYSE:UNH) reported solid quarterly results and raised 2022 guidance modestly. Additionally, managed care is another industry that is viewed as defensive in the current environment, which helped support UnitedHealth and its peer group.”
1. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 93
Thermo Fisher Scientific Inc. (NYSE:TMO) offers life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and services worldwide. It is one of the elite healthcare stocks to invest in. On September 20, the company revealed that it had opened a $160 million facility in Chelmsford. The purpose of opening this facility was to produce vaccines and therapies for cancer and other diseases through biological materials.
On September 12, Barclays analyst Luke Sergott maintained an Overweight rating on Thermo Fisher Scientific Inc. (NYSE:TMO) stock and lowered the price target to $595 from $685.
At the end of the second quarter of 2022, 93 hedge funds in the database of Insider Monkey held stakes worth $7.8 billion in Thermo Fisher Scientific Inc. (NYSE:TMO), compared to 101 in the preceding quarter worth $7.97 billion.
In its Q2 2022 investor letter, Stewart Asset Management, an asset management firm, highlighted a few stocks and Thermo Fisher Scientific Inc. (NYSE:TMO) was one of them. Here is what the fund said:
“Recently we initiated two new investments. One in Thermo Fisher Scientific (NYSE:TMO), a supplier to the life sciences industry. We have followed the company for many years and the recent downturn in share price gave us a good entry price at which to invest. Thermo has had strong earnings growth for many years and is led by a superb team. The company’s recent acquisitions make it a full-service supplier to the biopharma and biotech industries.”
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