10 Best Healthcare Stocks To Buy According to Hedge Funds

4. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 96 

Merck & Co., (NYSE:MRK) often simply referred to as Merck, is a global pharmaceutical giant that develops, manufactures, and sells prescription medicines, vaccines, and animal health products. At its core, Merck is in the business of improving human and animal health through scientific innovation.

A major catalyst for Merck & Co., (NYSE:MRK) is its cancer drug Keytruda. This immunotherapy treatment continues to show strong growth and expand into new indications. In Q1 2024, Keytruda sales grew 20% year-over-year to $6.9 billion, demonstrating its ongoing potential. The recent FDA approval of WINREVAIR for pulmonary arterial hypertension also represents a new growth driver in the cardiometabolic space.

Merck & Co., (NYSE:MRK)’s new pneumococcal vaccine for adults received FDA approval, marking a key breakthrough. The company also acquired EyeBio to develop retinal treatments and expanded its Animal Health segment by acquiring Elanco’s aqua business. In Q2 2024, Merck’s Human Health grew 11%, Animal Health rose 6%, and its cancer drug saw a 21% sales boost, reaching $7.3 billion. Additionally, its new pulmonary arterial hypertension vaccine, launched in March, reported $70 million in sales.

As of Q2 2024, around 96 hedge fund holders held stakes in the stock from among those we tracked, with Fisher Asset Management being the largest stakeholder from these with position worth $1.77 billion. Analysts have an optimistic 12-month price projection of $140, which represents a 21% increase from the current prices for MRK.

Regarding Merck & Co., Inc. (NYSE:MRK), Baron Funds’ Baron Health Care Fund made the following statement in its investor letter for the first quarter of 2024, explaining why they think the company outperformed in Q1:

“Global pharmaceutical company Merck & Co., Inc. (NYSE:MRK), Inc. contributed to the continued growth of Keytruda, the company’s key asset and the leading immuno-oncology agent used to treat a variety of cancers. The FDA’s late March approval of pulmonary arterial hypertension drug sotatercept also drove share gains. We retain conviction as Merck has started to transition from prioritizing its Keytruda franchise to building a more diversified business, with a focus on the Gardasil vaccine, pneumococcal vaccine development, and cardiovascular drug development, well in advance of the scheduled expiration of patent protection/exclusivity rights.”