The healthcare sector is home to many of the largest companies in the market. Of the $9 trillion spent on healthcare globally, almost half — about $4.3 trillion — is spent in the U.S.
These numbers more than double the numbers spent on tech products and services annually. It’s no wonder that some of the hottest stocks are found in the healthcare sector.
Healthcare stocks include all of the following:
The healthcare sector is known as a defensive sector — even when interest rates creep up, spending in defensive sectors remains the same. But the recent pandemic gave an unprecedented boost to the sector, and biotech stocks fell further than the rest of the market in 2022.
Even though things remain in flux, these stocks are ALWAYS worth watching.
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The Best Healthcare Stocks in May 2024 — Sector Leaders
Let’s unpack what the ‘best healthcare stocks’ should mean to you. I definitely don’t mean that they’re the best stocks to invest in.
I don’t think that any stocks are ‘safe.’ What I look for is volatility, and the best healthcare stocks have plenty of it!
Your job as a trader is to profit from volatility, do NOT fall in love with any trade or asset as a trade is not profitable until you lock in your profits & getting emotional can muddy the waters. Similarly, it's difficult to cut losses fast if you become too emotionally involved
— Timothy Sykes (@timothysykes) December 7, 2021
When you’re learning about a sector, pay attention to the sector leaders. Their charts can tell you a lot about the health of the sector.
When they’re running, their momentum can affect their entire sector and create the sympathy plays I like to trade!
Moderna Inc [NASDAQ: MRNA]
Moderna is a commercial-stage biotech that was founded in 2010 and had its initial public offering in December 2018. The firm’s mRNA technology was rapidly validated with its COVID-19 vaccine, which was authorized in the United States in December 2020.
Moderna went supernova in the pandemic. While it’s down from its heights, it managed to retain a good amount of its gains.
Pfizer Inc. [NYSE: PFE]
Pfizer is one of the world’s largest pharmaceutical firms, with annual sales close to $50 billion (excluding COVID-19 product sales). While it historically sold many types of healthcare products and chemicals, now, prescription drugs and vaccines account for the majority of sales. Top sellers include pneumococcal vaccine Prevnar 13, cancer drug Ibrance, cardiovascular treatment Eliquis, and immunology drug Xeljanz. Pfizer sells these products globally, with international sales representing close to 50% of its total sales. Within international sales, emerging markets are a major contributor.
Abbott Laboratories [NYSE: ABT]
Abbott manufactures and markets medical devices, adult and pediatric nutritional products, diagnostic equipment and testing kits, and branded generic drugs. Products include pacemakers, implantable cardioverter defibrillators, neuromodulation devices, coronary stents, catheters, infant formula, nutritional liquids for adults, molecular diagnostic platforms, and immunoassays and point- of-care diagnostic equipment. Abbott derives approximately 60% of sales outside the United States.
The Best Healthcare Penny Stocks in May 2024
The best healthcare penny stocks are constantly changing. Most of these companies won’t become the next Apple. I’m keeping them on watch to see if they match my preferred setups.
NOTE: I have NO intention of trading these stocks unless they suit my favorite setups. This is only a watchlist.
While we’ve highlighted some of the best healthcare stocks to trade, remember that the stock market is vast and dynamic. There are numerous other top-performing stocks across various sectors that could potentially offer lucrative trading opportunities. Diversifying your portfolio by investing in different sectors can help mitigate risk and increase your chances of earning profits. If you’re interested in exploring more top-performing stocks, here’s a list of 10 top stocks to invest in.
To find the best healthcare penny stocks requires a top-level stock screener. I use the one in StocksToTrade — I helped design it, so it has all the tools and customizations I look for to create my stock watchlists.
Try StocksToTrade for 14 days and see how it helps your watchlist skills — only $7!
These are the penny stocks I’m watching in May 2024:
Jaguar Health Inc. [NASDAQ: JAGX]
Jaguar Health Inc is a commercial-stage pharmaceuticals company focused on developing novel, plant-based, non-opioid, and sustainably derived prescription medicines for people and animals with Gl distress, specifically chronic, debilitating diarrhea. Its product Mytesi is a novel, first-in-class anti-secretory agent which has a basic normalizing effect locally on the gut, and this mechanism of action has the potential to benefit multiple disorders.
Emergent Biosolutions Inc. [NYSE: EBS]
Emergent BioSolutions offers public health products to government and healthcare providers. The company has four main units: vaccines, which produces specialty vaccines for public health threats; devices, such as nasal sprays, skin lotions, and injections; therapeutics, which includes antibody-based treatments; and contract development and manufacturing, which brings treatments to market through collaboration with the pharmaceutical and biotechnology industries and the United States government. Most revenue comes from U.S. government purchases of vaccine, device, and therapeutic products.
Vaxxinity Inc. [NASDAQ: VAXX]
Vaxxinity Inc is engaged in the development and commercialization of prophylactic and therapeutic vaccines to combat chronic disorders and infectious diseases with large patient populations and unmet medical needs. Its pipeline primarily consists of five programs focused on chronic disease, particularly neurodegenerative disorders, in addition to other neurology and cardiovascular indications.
How To Trade Healthcare Stocks
Learning how to trade healthcare stocks starts with your education.
Before you dive into the world of healthcare stocks, it’s essential to understand the diverse landscape of stocks available in the market. From growth stocks to value stocks, from large-cap to small-cap, each type has its own unique characteristics and potential for returns. Understanding these differences can significantly enhance your trading strategy and decision-making process. To get a comprehensive understanding of the various types of stocks, check out this detailed guide on different types of stocks.
You need to learn what penny stocks are, how they work, and how to identify their patterns.
My FREE penny stock trading guide is a good start.
From there, if you want to take it to the next level, consider joining my Trading Challenge.
Once you’re ready to start trading, you need a few key things…
Choose the Right Broker
To trade stocks, you need a brokerage account. Your broker is the gateway between you and trades. Choose a good one … Do your research and check out this guide for more tips.
Check out this quick startup guide to choosing a broker:
Get a Powerful Stock Platform
A stock screener can help you narrow down the many stocks available to trade. I use StocksToTrade, which can also help with the next item…
Build Your Watchlist
Before every trade, you need to perform a detailed stock analysis.
There are two key types of stock analysis: fundamental analysis and technical analysis.
See how I build my watchlists every Sunday by signing up to my NO-COST weekly watchlist!
StocksToTrade can help you do both: it has awesome charting software and links to stock news, SEC filings, and even social media mentions.
With day trading penny stocks, technical analysis — reading the charts — matters more. Chart patterns show me how a stock’s performed over weeks, months, or even years. That helps me on the next step…
Follow Your Trading Plan
A trading plan is where you plot out entry and exit points, risk, and profit goals. Ideally, you base the plan on careful research and stick to it.
Your strategy should encompass everything from risk management to identifying potential trading opportunities, from understanding market trends to knowing when to enter and exit a trade. A well-planned strategy can be the difference between success and failure in the volatile world of day trading. If you’re looking to build or refine your day trading strategy, here’s a comprehensive guide on day trading strategies that can help you navigate the market more effectively.
Track Every Trade
You need to keep a METICULOUS trading journal. This is where the science of trading comes in.
How do you know what strategies work for you, and which don’t? You look at your trading journal.
How do you know when you’ve been overtrading and need a timeout? You look at your trading journal.
If you’re not careful, your emotions can determine your trading approach. Before long, you’ll be wearing the same socks that you were wearing on your “big day.” That isn’t trading anymore — that’s gambling.
Rinse and Repeat
Real trading is a job. It isn’t a boring, 9-5 job, but it’s still something that rewards consistency and discipline.
Follow these rules throughout your trading career. That will separate you from the constant flow of newbies trying to get rich quick, and protect you from the scammers trying to sell trading shortcuts.
