In this piece, we will take a look at the eleven best medical stocks under $10. If you want to skip our analysis of the medical industry and recent trends, head on over to 5 Best Medical Stocks Under $10.
The medical industry is one of the most capitally intensive and competitive sectors in the world. Broadly speaking, it has a variety of sub sectors such as pharmaceutical firms, healthcare plan providers, medical equipment providers, and hospital companies. Within it, it's often healthcare plan providers and pharmaceutical firms that often see the greatest consumer attention since most people are unaware of the fact that hospitals are also often part of companies that are traded on the stock market.
Naturally, these subsegments of the medical industry have their own market valuations. The overall medical industry's profits, according to research from McKinsey, are slated to grow by a compounded annual growth rate (CAGR) of 4% between 2021 and 2026 and from an initial value of $654 billion to a final value of $790 billion. Diving deeper into the constituents of the medical industry, there is tons of research available that enable us to understand just how much the individual sectors are worth. In a fact that might surprise you, the hospital industry is one of the most valuable medical industries in the sector. It's estimated to grow at a CAGR of 12.5% between 2021 and 2028, from an initial value of $820 billion to a final value of $2 trillion. The second most valuable medical industry is pharmaceutical manufacturing. This segment was worth $358 billion in 2020 and is slated to grow to a whopping $1.2 trillion by 2030 through growing at a CAGR of 13%.
Yet, the discussion so far excludes perhaps the most popular medical segment and certainly the fastest growing. A boom in computing has spurred new industries and injected fresh life into older ones, and for healthcare and medical, this applies to the biotechnology market. Estimates about its value, and not only the growth are equally likely to stun you. For instance, research from Grand View Research outlines that the biotechnology industry was worth $1.37 trillion in 2022. And despite the trillion dollar valuation, the sector is expected to grow at a CAGR of 13.96% between 2023 and 2030 to be worth a stunning $3.88 trillion. Naturally, you might be curious about which biotechnology stocks hedge funds are investing in (this is a hedge fund tracking website after all), and some of their top biotechnology stock picks are Merck & Co., Inc. (NYSE:MRK), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV).
The outbreak of the coronavirus pandemic shook up both the world and the medical industry. At the same time, these changes also transformed the sector, and to an extent, changed the operating dynamics of medical firms. At least that's what McKinsey believes, who, in a fresh report, shares some tips for healthcare firms to be successful in the future. The research and consultancy firm believes that healthcare firms have to develop a more consumer centric approach in their business moving forward. This makes intuitive sense, particularly in America, where the high costs of healthcare and the strict bureaucratic systems within the sector often miss out on the pain that people are going through. McKinsey believes that out of the eight steps in the healthcare journey - namely getting coverage, understanding benefits, finding and receiving care, following up with a provider, managing prescriptions, managing health, and paying for care - customers are highly dissatisfied with four. If you are familiar with the American healthcare system, you'd be unsurprised to know that these four segments are getting coverage, saving for care, finding coverage, and understanding benefits.
This dissatisfaction is affecting both the health of the consumers and the burden emergency rooms have to deal with. The two are inextricably related, even though the latter might sound counterintuitive at first. According to McKinsey, people who are dissatisfied with healthcare and the medical industry, often delay their care which eventually leads to more emergency visits in the future. To solve these problems, the firm suggests that solutions such as a transparent payment process will go a long way for both consumers and healthcare providers.
Moving our attention back to stocks, true to form, some of the biggest healthcare and medical companies in the world are American. However, when it comes to the biggest hospital companies, the picture is more balanced, with American, European, and Chinese companies present in the list of the biggest hospital companies in the world. Some top hospital companies in terms of their total assets are HCA Healthcare, Inc. (NYSE:HCA), Fresenius Medical Care AG & Co. KGaA (NYSE:FMS), and Tenet Healthcare Corporation (NYSE:THC).
Finally, 2023's inflationary pressures, which are finally starting to ease have also caused worries of a recession due to the methods used to bring down prices. So what's in store for the healthcare sector? Well, here's what the management of HCA Healthcare had to say during its first quarter of 2023 earnings call:
With respect to our people agenda, we saw continued improvements across virtually all metrics.
The improvement in turnover rates accelerated from the fourth quarter and we ended the quarter close to pre-pandemic levels. Registered nurse hiring also improved in the quarter. Hiring increased almost 19%, compared to the previous four quarter average. These positive results helped reduce contract labor cost 21%, compared to last year. We continue to invest in our people through compensation programs, increased training and innovative care models. We believe these programs advanced our capabilities to provide high quality care to our patients. Once again, our colleagues demonstrated a remarkable ability to adapt and deliver value across all stakeholder groups.I want to thank them for their dedication, their hard work, and their overall effectiveness.
During the quarter, we continued to experience periodic capacity constraints that prevented us from fully operating our capacity. As compared to the fourth quarter, instances where we could not accept patients from other hospitals declined 25% and represented 1.5% of total admissions in the quarter, which was down from 2% in the fourth quarter. While we are pleased with this improved trend it still remains above pre-pandemic levels.Close with this, we remain encouraged by the backdrop of strong demand that we saw in our markets.
With these details in mind, let's take a look at some great medical stocks under $10, out of which some top picks are Teva Pharmaceutical Industries Limited (NYSE:TEVA), Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), and CymaBay Therapeutics, Inc. (NASDAQ:CBAY).
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To compile our list of medical stocks under $10, we first narrowed down the forty biggest medical companies (insurance firms are excluded) in terms of their market capitalization whose share prices were less than $10. Then, they were ranked through the number of hedge fund investors that had bought their shares as of the first quarter of this year. The resulting list of medical stocks under $10 is as follows.
11 Best Medical Stocks Under $10
11. CTI BioPharma Corp. (NASDAQ:CTIC)
Number of Hedge Fund Investors In Q1 2023: 20
CTI BioPharma Corp. (NASDAQ:CTIC) is a biotechnology company headquartered in Seattle, Washington. The firm is a specialized entity that focuses primarily on developing treatments for blood cancer.
By the end of this year's first quarter, 20 of the 943 hedge funds part of Insider Monkey's database had bought and owned a stake in CTI BioPharma Corp. (NASDAQ:CTIC). Out of these, the firm's largest hedge fund investor is David Rosen's Rubric Capital Management since it owns eight million shares that are worth $37 million.
Along with Teva Pharmaceutical Industries Limited (NYSE:TEVA), Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), and CymaBay Therapeutics, Inc. (NASDAQ:CBAY), it is a cheap medical stock that hedge funds are piling into.
10. EQRx, Inc. (NASDAQ:EQRX)
Number of Hedge Fund Investors In Q1 2023: 22
EQRx, Inc. (NASDAQ:EQRX) is another biotechnology company. Headquartered in the American biotechnology hub Boston, it develops medicine for lung, breast, liver, and other cancers.
22 of the 943 hedge funds part of Insider Monkey's database had bought a stake in EQRx, Inc. (NASDAQ:EQRX) as of March 2023.
9. Adaptive Biotechnologies Corporation (NASDAQ:ADPT)
Number of Hedge Fund Investors In Q1 2023: 22
Adaptive Biotechnologies Corporation (NASDAQ:ADPT) is a diversified biotechnology firm that has a research platform for drug research and develops its own medicines as well. Operating out of Seattle, Washington, the firm has products to treat diseases such as myeloma and leukemia.
Insider Monkey took a look at 943 hedge funds for their first quarter of 2023 investments to find out that 22 had invested in the firm. Adaptive Biotechnologies Corporation (NASDAQ:ADPT)'s largest hedge fund investor in our database is Andreas Halvorsen's Viking Global with a $264 million stake.
8. GoodRx Holdings, Inc. (NASDAQ:GDRX)
Number of Hedge Fund Investors In Q1 2023: 23
GoodRx Holdings, Inc. (NASDAQ:GDRX) is a medical company that runs a platform to enable users to discover information about medicines and their prices to save on costs. It also enables users to consult for healthcare advice digitally.
After sifting through 943 hedge funds for their Q1 2023 shareholdings, Insider Monkey discovered that 23 had bought GoodRx Holdings, Inc. (NASDAQ:GDRX)'s shares. Its largest investor is Jim Davidson, Dave Roux, and Glenn Hutchins's Silver Lake Partners with a $22 million investment.
7. Ginkgo Bioworks Holdings, Inc. (NYSE:DNA)
Number of Hedge Fund Investors In Q1 2023: 24
Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) is a biotechnology company that has struggled of late. It seeks to program cells to generate products for medicinal and other users. However, investor pessimism about the results of this technology has hurt the stock price.
24 of the 943 hedge funds surveyed by Insider Monkey for their March quarter of 2023 shareholdings had invested in Ginkgo Bioworks Holdings, Inc. (NYSE:DNA).
6. Elanco Animal Health Incorporated (NYSE:ELAN)
Number of Hedge Fund Investors In Q1 2023: 28
Elanco Animal Health Incorporated (NYSE:ELAN) is a medical company that focuses on animal health. It provides both disease prevention and disease management products.
As of March 2023, 28 of the 943 hedge funds profiled by Insider Monkey had bought and owned the firm's shares. Elanco Animal Health Incorporated (NYSE:ELAN)'s largest investor is D. E. Shaw's D E Shaw with a $73 million stake.
Teva Pharmaceutical Industries Limited (NYSE:TEVA), Elanco Animal Health Incorporated (NYSE:ELAN), Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), and CymaBay Therapeutics, Inc. (NASDAQ:CBAY) are some medical stocks under $10 that are on the hedge fund radar.
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Disclosure: None. 11 Best Medical Stocks Under $10 is originally published on Insider Monkey.