BHVN - The 3 Smartest Healthcare Stocks to Buy With $1K Right Now
2024-06-28 10:00:00 ET
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Healthcare stocks to buy have been off to the races recently — especially the ones in the weight-loss drug market. Indeed, the market is huge and could entail considerable growth for many years into the future. That said, it’s not just the GLP-1 drug stocks that should receive the love in the biotech and healthcare scenes.
Weight-loss drug innovators aside, there are a great deal of attractively valued healthcare companies that stand to make life better for individuals living with various conditions. And down the road, perhaps artificial intelligence ( AI ) could help accelerate progress on various treatments and increase efficiency. Indeed, the elimination of administrative overhead and AI-assisted drug discovery are intriguing areas to watch for healthcare stocks to buy.
Here are three promising healthcare stocks to buy for investors looking to put a new $1,000 sum to work.
Eli Lilly (LLY)
Eli Lilly (NASDAQ: LLY ) is perhaps one of the best ways to play weight-loss drug innovation. As the GLP-1 drugs gradually move from shots to pills, Eli Lilly may be able to pull further ahead of rivals. Undoubtedly, the company’s new oral GLP-1 drug, Orforglipron , stands out as a potential next step that could jolt growth further.
Additionally, Lilly has many other potentially transformative drug candidates (think Donanemab for slowing the progress of Alzheimer’s) in its profoundly impressive pipeline, some of which could move the needle.
With the recent OpenAI collaboration, perhaps Eli Lilly, a company that’s already moving fast in biotech, could be made that much faster. Even at more than 132 times trailing price-to-earnings (P/E), LLY stock looks like a top stock in the industry.
With numerous growth drivers, don’t be surprised if Eli Lilly joins the $1 trillion market cap club later this year.
Biohaven (BHVN)
Biohaven (NASDAQ: BHVN ) is a lesser-known biotech mid-cap with a $3.1 billion market cap. At writing, BHVN stock is coming off a painful 40% correction from its all-time high.
Undoubtedly, enthusiasm over the firm’s promising pipeline has begun to fade significantly following recent updates on a number of its drug candidates.
Notably, the interim data for BHV-1300 , a drug to treat autoimmune diseases, did not impress. It’s important to note that the drug is still in its very early stages, and there’s still plenty of promise. In any case, the bar seems to have been lowered significantly, perhaps by too low, given the still-promising potential of the overall pipeline.
While the stock still looks quite expensive at more than 10 times price-to-book (P/E), it’s still an intriguing mid-cap biotech to watch if you’re comfortable with high-risk/high-reward scenarios.
CVS Health (CVS)
From biotech innovators to health insurance and pharmacy retail, CVS Health (NYSE: CVS ) stands out as a compelling deep-value play.
Today, CVS stock is coming back from a brutal late-April crash that wiped out close to 20% in a hurry. Indeed, health insurance has been a tough place to be amid rising medical costs and worse medical benefit ratios. Still, not all hope is lost as CVS looks to introduce new tech-driven efforts to help it drive efficiencies and save money.
Most notably, CVS has been looking into AI to help it with customer service . It’ll probably take time for AI to boost the firm, but CVS will eventually emerge as a downstream AI winner.
Aside from AI call centers, perhaps CVS could be one of the first to automate pharmacies fully. Either way, CVS stock looks too cheap at 10.6 times trailing P/E, given its underrated tech-savvy and potential for industry headwinds to subside in the second half.
On the date of publication, Joey Frenette did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .
Joey Frenette is a seasoned investment writer specializing in technology and consumer stocks. Contributing to the Motley Fool Canada, TipRanks, and Barchart, Joey excels in spotting mispriced stocks with long-term growth potential in a fast-paced market.
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