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3 Healthcare Trends to Ride for Longevity

In 2023, outside of tech, one of the strongest trends in the equity market is healthcare and dietary-related stocks. While tech stocks can be volatile, dietary and healthcare-related stocks often enjoy trends that last for years for several reasons. First, the aging demographics in the United States and around the world lead to a challenges and opportunities. Medical technology drug innovation advancements can spark multi-year growth trajectories for highly specialized med-tech companies such as Intuitive Surgical (ISRG).

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Finally, consumers often change their dietary preferences based on new studies and scientific discoveries. Below are 3 stocks benefitting drastically from the current healthcare landscape.

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Trend: Rampant Obesity

Unfortunately, the onset of processed foods and a more robust global economy in recent years has led to increasing levels of obesity and diabetes. Around 40% of the American population is obese. Though dietary changes and exercise are potential solutions, many cases of obesity have gone too far, or people are too lazy to adopt such changes. Enter Zacks Rank #1 stock Novo Nordisk (NVO). NVO is the leader in diabetes treatment – a space likely to see demand for years. Ozempic, the company’s blockbuster diabetes drug, is increasingly used for weight loss and diabetes treatments worldwide. Last quarter, earnings shot higher by 38% year-over-year.

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Zacks Investment Research


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NVO’s beta of 0.48 means that the stock tends to be less volatile than the general market. Shares are etching out a bull flag pattern as they pull back to the 50-day moving average.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Trend: The Healthcare Industry’s Growth Over Time

Stryker (SYK) is a medical device company benefitting from rising healthcare demand. Because healthcare is a non-negotiable, SYK is a stock more immune to economic downturns. Furthermore, the company has a diverse and wide-ranging product portfolio, so it is not dependent on one core product like many other med-tech firms. Stryker’s deep portfolio includes emergency medical equipment, surgical navigation systems, and implant products – to name a few.

Stryker’s success is nothing new. Dating back to the early 1990’s, shares have been in one of strongest uptrends in the market, gaining some 8,800%. From a shorter-term perspective, shares are finding support at the 50-day moving average – a strong reward-to-risk zone where institutions tend to step in and buy shares.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Trend: Increased Cardiovascular Disease Cases

Heart disease is the number one cause of death for all sexes and racial backgrounds. According to the CDC, on average, one person dies every 33 seconds from cardiovascular disease in the United States. Shockwave Medical (SWAV) is a medical device company specializing in products to treat cardiovascular disease. Through its proprietary system, cardiologists have a means of delivering minimally invasive sonic pressure waves that treat calcified plaque. SWAV’s robust fundamentals are helping its underlying price and volume action. Year-to-date, shares of SWAV are higher by nearly 37%, while the company’s peer group is lower by 26%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Bonus Trend: Healthy & Environmentally Friendly Beverages.

Though Zacks Rank #2 (Buy) stock Vita Coco (COCO) is not a healthcare stock, it benefits from strong dietary and taste preference trends. As the name implies, Vita Coco is one of the most popular coconut water brands. Coconut water has several health benefits. It can be consumed as an alternative to sugary sports drinks, as re-hydration, or as a natural energy enhancer. Beyond the many nutritional benefits, consumers are willing to pay a premium for Vita Coco’s products because of its sustainability, environmental friendliness, and all-natural ingredients.

COCO is a member of the Beverage-Soft Drink industry group – a Zacks top 10% industry. From a fundamental perspective, the company has several things going for it. Last quarter, COCO beat earnings expectations by 50% as EPS shot higher by 200% and revenues increased by 14% year-over-year. Though the stock has moved up a lot in recent months, analysts remain bullish. Over the past 60 days, Zacks Consensus Estimates show that analysts are becoming more bullish on the company’s earnings going forward.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

From a technical perspective, investors are getting a chance to purchase shares on a dip to support. Monday, shares dropped to the 50-day moving average for the first time since March after COCO announced a 4.5 million share secondary offering. Though shares were getting hit hard early, investors stepped in at the 50-day moving average to scoop up shares at a bargain. Investors can use the moving average as a trend guide moving forward.

Conclusion

Because of their longevity, predictability, and stability, healthcare trends can often persist for years. The stocks mentioned above are fundamentally and technically robust stocks currently taking advantage of these trends.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Novo Nordisk A/S (NVO) : Free Stock Analysis Report

Vita Coco Company, Inc. (COCO) : Free Stock Analysis Report

Stryker Corporation (SYK) : Free Stock Analysis Report

Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report

ShockWave Medical, Inc. (SWAV) : Free Stock Analysis Report

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Zacks Investment Research