with S&P 500 has dropped 20% year-to-date, it could be a good time to grab some stock market bargains.
why tomorrow? put together a list among the “best stocks to own” in various industries, and the healthcare sector is generally solid.
“Health care is a sector that generally holds steady regardless of what is happening in the economy,” the research firm said. That’s important, given expectations that the economy will slow down and possibly fall into Depression next year.
So how does Morningstar define “best stock”?
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wide moat
These are companies with broad moats, which means they have a strong and sustainable advantage over their competitors. Morningstar said: “We are confident they will generate a higher return than the cost over the next 20 years or more.
“Their strength of their competitive advantage has also stabilized or increased, which adds to our confidence in their long-term growth.”
Environmental/social/governance (ESG) factors also play a role. “The best companies have business models that allow them to effectively navigate evolving ESG issues that can seriously impact their business,” Morningstar said.
Other metrics are also relevant. “Our shortlisted companies have predictable cash flows, so our analysts can more accurately estimate the value of those businesses,” Morningstar said. “These companies also make smart decisions about how they manage and invest their money.”
Morningstar does not recommend that you buy all of these stocks right now. About half of the stocks on its master list recently traded above the company’s fair value estimate.
Only eight of the 19 healthcare stocks recently cited by Morningstar are trading below their fair value. Here they are.
- The Roche Organization (RHHBY) Swiss pharmaceutical company.
- Thermo Fisher Scientific (TMO) – Get a free report, scientific equipment company
- sanofi (SNY) – Get a free report, a pharmaceutical company based in France.
- Medtronic (MDT) – Get a free report, medical equipment company.
- Zoetis (ZTS) – Get a free report, where animal health products are sold.
- GSK (GSK) – Get a free report, British pharmaceutical company.
- Biometrics Zimmer (ZBH) – Get a free report, a medical device manufacturer.
- Western Medicine Service (WST) – Get a free reportsource for the pharmaceutical industry.
Roche: Morningstar analyst Karen Andersen puts the stock’s fair value at $57, and it recently traded at $39.39.
Despite disappointing trial results for gantenerumab, Roche’s Alzheimer’s drug, “we remain optimistic about Roche’s established portfolio and robust growth system in the oncology field. ,” she wrote in a commentary.
Roche also has “solid growth prospects for other important drugs in the immunology and hematology fields.” In addition, Roche is a market leader in biotechnology and diagnostics, Andersen said.
Heat Fisherman: Morningstar analyst Alex Morozov puts the stock’s fair value at $590. It was recently trading at $540.68.
“Amid the declining corona virus revenueThermo Fisher Generous Science third quarter is strong,” he wrote in a commentary.
The company’s core operations, supported by biopharmaceutical demand, grew 14% in the quarter, implying market share profits for the company.”
Furthermore, Thermo “claims that it almost completely compensates inflationary through the price increase, which is impressive and supports the company’s dominant supplier position,” said Morozov.
The author of this story owns shares of Medtronic.
