Gorilla Trades strategist Ken Berman, who has gone by the moniker “the Gorilla” for two decades, is bullish on the healthcare stocks listed below. “At approximately 17% of GDP, healthcare is a good place for value investors to find growth,” he said, “But these companies passed our fundamental and qualitative screens for capital appreciation”.
Ken Berman has an admirable track record with his forecasts.
- Based on historical data, companies in his portfolio reach their price targets approximately 70% of the time.
- In December of 2018 amid a 17% correction, Berman forecast the S&P 500 would reach new all-time highs in 2019.
- Back in 2017, he predicted the Dow Jones Industrial Average would break the 24,000 level by 2019.
Healthcare Stock Picks
Aligent (A). Six to 12 Month Price Target: $108
Aligent bought BioTek for $1.2 billion recently, expanding Aligent’s presence in the cell analysis market. Aligent ended 2019 on a high note, and has committed to spending 85% of free cashflow on stock buybacks and dividends.
Amerisouce (ABC). Six to 12 Month Price Target: $107
This healthcare stock had records profits during its most recently completed fiscal year and sentiment augurs for continued momentum in 2020. A solid balance sheet, with a lower share count and interest expense present the prospect of a dividend increase in fiscal 2020.
Abbott Labs (ABT). Six to 12 Month Price Target: $108
Abbott has been performing in-line with expectations, but the medical device business — in particular its Libre glucose monitoring system and heart valve devices — can serve as a catalyst for the shares.
Quest Diagnostics (DGX). Six to 12 Month Price Target: $128
Volume gains for Quest have been thin, keeping the stock near all time highs. Drug testing is increasingly important in a variety of industries and Quest is well positioned to capitalize on this trend.
Edwards Lifesciences (EW). Near term price target $295
Transcatheter Aortic Valve Replacement, where EW is a leader, continues to drive the company’s earnings and there’s appears to be nothing to diminish the momentum in this market. Further Edwards has a number of other products in its portfolio, notably in its Surgical Structural Heart and Critical Care units. Transcatheter and Mitral Tricuspid products are developing more slowly, but may be long term drivers.
Illumina (ILMN). Six to 12 Month Price Target: $390
Illumina has taken a breather so far in 2020 likely owing to little change in guidance and pushback from European regulators on its acquisition of Pacific Biosciences. Still Illumina has more than doubled its earnings per share since 2015, and increased EPS by more than 10X since 2011, a trajectory the healthcare stock is positioned continue.
Intuitive Surgical (ISRG). Six to 12 Month Price Target: $725
Intuitive Surgical shares have been on a steady climb upward since 2015, and there are few obstacles to continued growth. ISRG is enjoying double digit procedure growth in U.S. and non-US markets with its da Vinci surgical systems.
Nuvasive (NUVA). Six to 12 Month Price Target: $96
Management has tightened guidance on sales and earnings to the upside and raised the range of its EPS forecast. Realizing this growth seems within reach given geographic expansion, infrastructure upgrades, R&D investments and new products.
Zoetis (ZTS). Six to 12 Month Price Target: $170
Zoetis has now beaten Wall Streets EPS forecasts for nine quarters in a row. Strength in its growing companion animal business and cost control offer a viable set up for further beats in the near term. Longer term, new products and growth in companion animal are viable drivers for this healthcare stock.