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5 Health Care Stocks Outperforming the S&P 500

GuruFocus.com
·5 min read

- By James Li

As the world grapples with an unprecedented coronavirus pandemic, five health care stocks that have outperformed the Standard & Poor's 500 Index by at least 5% in the year to date are AmerisourceBergen Corp. (NYSE:ABC), Chemed Corp. (NYSE:CHE), Neogen Corp. (NASDAQ:NEOG), Novo Nordisk A/S (NYSE:NVO) and ResMed Inc. (NYSE:RMD) according to the All-in-One Screener, a Premium feature of GuruFocus.


U.S. markets slip on renewed fears of coronavirus spread

On Tuesday, the Dow Jones Industrial Average closed at 27,451.81, down 132.25 points from Monday's close of 27,584.06. The 30-stock index traded at an intraday low of 27,338 earlier in the day as investors dealt with rekindled fears of the Covid-19 virus spreading around the globe.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

According to Johns Hopkins University statistics, global coronavirus casualties topped 1 million, a grim milestone in the world's fight against the virus. CNBC added that Dr. Mike Ryan, executive director of the World Health Organization's health emergencies program, told reporters that the world must "reflect" on the milestone before starting its march to 2 million casualties.

Stocks hit intraday lows on the heels of New York City's Covid-19 positivity rate topping 3% for the first time in months according to Mayor Bill de Blasio, dampening investor sentiment.

As health care companies continue developing coronavirus vaccines and other measures to curb the spread of the virus, investors may find opportunities in health care stocks that have outperformed the S&P 500 over the past nine months. The Screener listed five stocks that have high financial strength and profitability.

AmerisourceBergen

Shares of AmerisourceBergen closed at $96.16, fairly valued according to GuruFocus' exclusive value method. The stock has outperformed the S&P 500 benchmark by approximately 12.45% year to date.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

The Chesterbrook, Pennsylvania-based company sources and distributes specialty, brand-name and generic pharmaceuticals to acute-care hospitals, clinics and pharmacies. GuruFocus ranks the company's profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and a four-star business predictability rank.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

Gurus with holdings in AmerisourceBergen include Larry Robbins (Trades, Portfolio)' Glenview Capital Management and Seth Klarman (Trades, Portfolio).

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

Chemed

Shares of Chemed closed at $478, modestly overvalued according to the GF Value method. The stock has outperformed the S&P 500 benchmark by approximately 5.78% in the year to date.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

Through its Vitas segment, which generates the majority of the company's revenues, Chemed provides hospice and palliative care services to terminal-stage patients through a network of physicians and registered nurses. GuruFocus ranks the Cincinnati-based company's profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, a five-star business predictability rank and an operating margin that has increased approximately 4% per year on average over the past five years and is outperforming over 83% of global competitors.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

Gurus with holdings in Chemed include Jim Simons (Trades, Portfolio)' Renaissance Technologies and Ken Fisher (Trades, Portfolio)'s Fisher Investments.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

Neogen

Shares of Neogen closed at $77.33, modestly overvalued based on its GF Value. Despite this, the stock has outperformed the S&P 500 benchmark by 15.09% year to date.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

The Lansing, Michigan-based company develops and markets a range of products related to food and animal safety. GuruFocus ranks the company's financial strength 10 out of 10 on the back of no long-term debt and a double-digit Altman Z-score. Other positive investing signs that contribute to a profitability rank of 9 include a four-star business predictability rank and a net margin that outperforms approximately 82% of global competitors.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

Novo Nordisk

Shares of Novo Nordisk closed at $70.22, modestly overvalued based on its GF Value. Despite this, the stock has outperformed the S&P 500 benchmark by 17.95% year to date.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

The Denmark-based company manufactures and markets a wide range of human and modern insulins and other diabetic products. GuruFocus ranks Novo Nordisk's profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank and an operating margin that has increased approximately 0.8% per year on average over the past five years and is outperforming over 97% of global competitors.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

ResMed

Shares of ResMed closed at $172.66, modestly overvalued based on its GF Value. The stock has outperformed the S&P 500 benchmark by 7.94% in the year to date.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

The San Diego-based company develops and supplies flow generators, masks and accessories for sleep apnea patients. GuruFocus ranks the company's profitability 10 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, a five-star business predictability rank and an operating margin that has increased approximately 2.2% per year on average over the past five years and is outperforming over 90% of global competitors.

5 Health Care Stocks Outperforming the S&P 500
5 Health Care Stocks Outperforming the S&P 500

Disclosure: No positions.

Read more here:

  • 4 High-Quality Stocks With Strong Returns on Equity

  • 5 Buffett-Munger Stocks With High Dividend Yields

  • 4 Stocks With Strong Earnings Growth Over the Past 5 Years



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This article first appeared on GuruFocus.