No reason to sell in May
As the first quarter reporting came to a close, we continue to witness the same trends playing out: healthcare fundamentals are strong. Driven by ageing population and better treatment solutions, treatment volumes and drug sales have been robust. This can also be seen in the dynamic US job market, where a third of all new hires in the last
12 months were in the healthcare sector.
Overall, our confidence in the sector remains high as we look forward to conferences and continuing innovation over the summer.
End of Q1 reporting confirms trends
First quarter reporting is now over, and healthcare has shone, with almost two thirds of companies reporting a better-than-expected profitability and aggregate sales growth of 5%, better than the market and than most other sectors.
Medtech, hospital and healthcare insurance fundamental strength was confirmed on the back of continuing high healthcare utilization rates.
Managed care groups have underperformed this month on the back of margin pressure fears.
Vaccine stocks rise on Avian Flu news
Moderna, Novavax, Curevac, Pfizer, BioNtech and other stocks involved with vaccine production soared over the past few weeks. This followed reports of additional cases of avian flu reported in the US, as well as HHS’ moving forward with mitigation plans which may include vaccines.
There have only been two confirmed cases of animal-to-human transmission in the US, and no human-to-human transmission.
We do not see this disease as presenting a high risk for humans nor a significant commercial opportunity.
Top 5 in March:
- Moderna +29% – Avian Flu newsflow
- Bio-Techne +22% – Earnings
- Teva+ 20% – Earnings
- Humana + 19%
- United Therapeutics +17% – Earnings
Bottom 5 in March:
- Exact Sciences -23% – Earnings
- Getinge -17% – FDA warning letter
- Baxter -16% – Earnings
- Illumina -15% – Earnings
- Carl Zeiss Meditec -13% – Earnings
Source: Bloomberg Finance L.P., Kieger
Chart of the Month
Over the past 10 years, there has been a significant dispersion between the best and worse performing stocks in each subsectors.
This is due to the complexity of the sector, which stands at the intersection of innovation, demographic and regulatory shifts.
This high level of dispersion ample possibilities for value creation through active management.
Check out our video on this subject here.
This news article has been issued through Kieger AG and is for distribution only under such circumstances as may be permitted by applicable law. This document is for information purposes only and does not constitute an offer. Past performance is not a reliable indicator of future results. The details and opinions contained in this document are provided by Kieger without any guarantee or warranty and are for the recipient’s personal use only. All information and opinions contained in this document are subject to change without notice. This document may contain statements that constitute “forward looking statements”. A number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. Data source: Statestreet / Factset.
