If you are looking to diversify your portfolio away from trade-war jitters and earnings volatility, consider the highly lucrative health care sector.
Most of the sector's companies don't fall under the tariffs being threatened on all sides. Indeed, the health care sector - as measured by the Health Care Select Sector SPDR (XLV) - is the third best-performing sector so far in 2018, behind technology and consumer discretionary stocks. From a breadth perspective, health care trailed only technology as of mid-July, with 67% of its components posting gains since the start of the year.
Another attractive feature is health care's "pop" potential - prices can surge on the back of positive clinical trial data or key regulatory approvals.
However, prices can plunge just as quickly if data or decisions disappoint. That's why investing in the health care sector requires some savvy analysis first. TipRanks market data can help, as it allows you to tune into the experts' takes.
Here are seven promising health care stocks to buy, according to Wall Street's pros. Each of these stocks has a "Buy" or "Strong Buy" analyst consensus rating and juicy upside potential, with analysts believing some could double or more.
SEE ALSO: 25 Stocks Every Retiree Should Own
Market value: $579.4 million
TipRanks consensus price target: $21.25 (100% upside potential)
TipRanks consensus rating: Strong Buy (See Details)
Akebia Therapeutics (AKBA, $10.63) is on the cusp of big growth. The company has just announced plans to merge with Keryx Biopharmaceuticals (KERX). Both Akebia and Keryx are developing drugs for adults living with iron deficiency anemia and chronic kidney disease. Indeed, Keryx boasts the only oral treatment option available today, known as Auryxia. Meanwhile, Akebia's vadadustat is currently in Phase 3 clinical trials.
"Bringing together the commercial infrastructure of Keryx along with the R&D capabilities of Akebia is a sound strategic decision in our view, especially given the complementary nature of both company's products," writes top Mizuho Securities analyst Difei Yang (view Yang's profile and recommendations). She has a $21 price target on the stock, suggesting share prices can roughly double.
Similarly, Piper Jaffray's Christopher Raymond believes we are now looking at a "significant opportunity" to own Akebia before the "real potential of a nephrology powerhouse with both Auryxia and vadadustat (becomes) more apparent." This is especially true now that new survey data shows that Auryxia "has not just turned a corner, but is really on quite a roll, both in terms of the drug's perception and its market share dynamics."
His $22 price target indicates massive upside potential of 107%.
- 25 Stocks Every Retiree Should Own
- The 15 All-Time Best-Selling Prescription Drugs
- 10 Blockbuster Drugs of the Future
Copyright 2018 The Kiplinger Washington Editors