In this piece, we will take a look at the 10 best organ transplant and diagnosis stocks to buy now.
In the dynamic landscape of healthcare, the importance of organ transplantation cannot be overstated. Transplant diagnostics is a specialized area of medicine dedicated to evaluating the compatibility between organ donors and recipients. This involves a range of laboratory tests, including HLA typing, cross-matching, and detection of antibodies, to reduce the risk of rejection and guide individualized treatment plans.
These diagnostics are essential for ensuring the success of organ transplants by accurately pairing donors with recipients. Technological advancements continually improve the accuracy and effectiveness of transplant diagnostics, playing a vital role in enhancing patient outcomes and shaping the future of organ transplantation.
Given that transplantation is a preferred choice for individuals with advanced kidney, heart, and even lung failure, it has given rise to some of the biggest and most successful companies in the healthcare sector. These companies have generated significant value by catering to the needs of individuals needing organ transplants, presenting attractive investment opportunities.
The growing demand and acceptance of organ transplantation fuel the expansion of the global organ and tissue transplant market. Consequently, the transplant sector is expanding at a compound annual growth rate (CAGR) of 9.35%, projected to reach a market value of $31.2 billion by 2029.
The expansion is propelled by breakthroughs such as living donor transplants and advanced technologies like next-generation sequencing for precise matching. The effectiveness of transplantation techniques and the high success rates of transplant procedures also contribute to the market’s growth.
Additionally, the surge in chronic disease cases and the growing number of surgical procedures contribute to the global organ transplant market growth. The increase in organ registrations is also anticipated to drive up the demand for organ transplants in the coming years. For instance, every year, over 200,000 new cases of lung cancer are reported, affirming the need for lung transplantation and surgery. The increasing need for organ and tissue transplants as a successful therapy for certain long-term illnesses is propelling the expansion of the worldwide transplant industry.
Rising funding for solid organ transplantation is also contributing to the market’s growth, creating some of the best investment opportunities around the 10 best organ transplant and diagnosis stocks to buy now. For instance, funding for organ transplant research was $208 million in 2020.
North America continues to exhibit significant expansion within the worldwide transplantation industry. The region’s robust infrastructure and the presence of substantial corporations play key roles in fueling the growth of the transplantation market, making it a hotbed for some of the best investment opportunities.
The 10 best organ transplant and diagnosis stocks to buy now are companies located in North America, as the region boasts sophisticated healthcare systems, advanced research and development, and established networks for organ procurement and transplantation. Cutting-edge medical facilities facilitate the successful execution of organ transplantation surgeries.
Likewise, the region’s organ transplant market was valued at $4.32 billion in 2023 and is projected to lead the worldwide market in the upcoming years. This leadership is anticipated to continue due to the high demand for innovative tissue grafts and organ transplants. Europe ranked as the second-largest market in the same year. The expansion of this market is linked to the rise in transplant surgeries and the crucial efforts by various governments to promote awareness about organ donation in the area.
Asia Pacific also experienced considerable growth, driven by the high incidence of organ failure in the area, a consequence of the increasing prevalence of chronic illnesses among the elderly population. In 2023, the Asia-Pacific organ transplant diagnostics market was valued at $1.25 billion. It is expected to reach $3.45 billion by 2033, with a CAGR of 10.73%. Latin America is also poised for growth. Mexico and Brazil’s organ donation and transplantation sectors offer promising prospects for significant market participants.
Ongoing research and development in organ transplantation are leading to significant advancements and innovations in the market. As per the National Institute of Health in May 2022, the budget allocated for transplantation research was $721 million, $702 million, and $735 million in 2020, 2021, and 2022 (estimated).
North America continues to set the pace on innovation in the organ transplant sector, with Massachusetts General Hospital (MGH) confirming the world’s first successful transplant of a genetically-edited pig (porcine) kidney into a 62-year-old man living with end-stage kidney disease (ESKD). The patient died almost two months after the transplant at 62. The historic procedure was carried out on March 16 at Massachusetts General Hospital. Even though the hospital said the cause of death was not related to the transplant, we need more clinical evidence for the safety of these procedures.
Source: Pexels
This transplantation marks an essential milestone in providing patients with more readily available organs. The successful organ transplant promises to offer a lifeline to millions of patients worldwide suffering from kidney failure.
Additionally, it marks an essential step in the transplantation of organs or tissues from one species to another as a potential solution to the worldwide organ shortage. According to the United Network for Organ Sharing (UNOS), more than 100,000 people in the U.S. await an organ for transplant, and 17 people die each day waiting for an organ.
The developments and growth being experienced in the organ transplant segment offer some of the best ways to diversify investment portfolios in the healthcare sector. The opportunities are expected to grow exponentially, considering that there are over 103,000 people on the national transplant waitlist looking for organ transplantation in the US alone.
Additionally, every 8 minutes, one person is added to the list. The strong demand for organ transplants should continue to drive growth in the market segment. That said, now is the best time to pay close attention to the 10 best organ transplant and diagnosis stocks to buy now and benefit from the growing organ transplant market.
Our Methodology
We sifted through online rankings and healthcare ETFs to identify companies involved in the organ transplant and diagnosis industries. We then selected the 10 most widely held stocks by hedge funds from an initial pool of 15 companies. The stocks are ranked based on the number of hedge funds that own stakes in them, according to the Insider Monkey database.
We also mentioned the number of hedge funds that had bought these stocks during the same filing period. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Best Organ Transplant and Diagnosis Stocks To Buy Now
10. BioLife Solutions, Inc. (NASDAQ:BLFS)
Market Cap as of August 1: $1.08 Billion
Hedge Funds Holding Stakes: 11
Biolife Solutions Inc (NASDAQ:BLFS) offers solutions for preserving biological materials like cells, tissues, and organs for organ transplantation. Their offerings, including CryoStor and HypoThermosol, enhance the condition and functionality of preserved tissues.
Biolife Solutions Inc (NASDAQ:BLFS) is one of the 10 best organ transplant and diagnosis stocks to buy now as it is rallying, going by the 48% year-to-date gain. Its cell processing revenue grew 10% in the first quarter to $16.2 million. The company generated $143.3 million in sales in 2023. Biolife Solutions Inc (NASDAQ:BLFS) was the subject of increased institutional holding as hedge funds holding stakes in the company, according to the Insider Monkey database, increased to 11 from 10 in Q1 2024.
9. CareDx, Inc (NASDAQ:CDNA)
Market Cap as of August 1: $1.24 Billion
Hedge Funds Holding Stakes: 15
CareDx, Inc (NASDAQ:CDNA) is involved in exploring, creating, and marketing diagnostic products for transplant recipients and their caregivers across the United States and globally. It also offers AlloSure Kidney, a solution derived from donor cells containing DNA but no cells, for patients undergoing kidney transplants; AlloMap Heart, which analyses gene expression for patients who have received heart transplants.
As one of the top 10 best organ transplant and diagnosis stocks to buy now, CareDx, Inc (NASDAQ:CDNA) is up by more than 60% for the year and continues to outperform the overall market. It delivered full-year sales of $280.3 million in 2023, down 13% year over year. Hedge funds holding stakes in CareDx, Inc (NASDAQ:CDNA) dropped to 15 in Q1 2024, according to Insider Monkey, from 19 as of the end of 2023.
In its first quarter 2024 investor letter, Baron Discovery Fund commented on CareDx, Inc (NASDAQ:CDNA) as follows:
“CareDx, Inc (NASDAQ:CDNA) is a diagnostic company that facilitates organ donor matches pre-transplant and rejection monitoring post-transplant. Transplant rejection testing is recurring and can help ensure the right immunosuppressant treatment to avoid over dosage or organ loss. After selling the position in the first quarter of 2023, we re-established an investment in the company. At the time, we noted that the reason for sale was “a very unexpectedly negative notice out of MolDx (which is the CMS-related entity that determines pricing and reimbursement criteria for diagnostic tests) exceeded our worst downside scenarios. The vagueness of the notice from MolDx, combined with the potential for a far reduced paid volume of approved tests for Medicare patients, puts a dramatic amount of current revenue and profitability at risk. We determined that until the issue is resolved, we could not properly underwrite our investment in the company.” As things currently stand, the company has lapped the massive negative revenue effect of the CMS notice and has started growing revenues again under the lower reimbursement regime. Combined with improvement in cash collections and meaningful efficiency improvements in operating expenses, we believe the company will be cash flow breakeven by 2025 and then will be completely self-funding given $235 million of cash and no debt on its balance sheet. The company trades at only 1.3 times its enterprise value to sales ratio, which should be at least double that level. We believe there is a reasonable chance that the CMS guidelines are reversed or at least improved from current levels. This would be a blue sky scenario, where we could see multiple doubles of valuation in a short period of time.”
8. TransMedics Group, Inc. (NASDAQ:TMDX)
Market Cap as of August 1: $4.99 Billion
Hedge Funds Holding Stakes: 21
TransMedics Group, Inc. (NASDAQ:TMDX) is a commercial-stage medical technology company that engages in organ transplant therapies for end-stage organ failure patients. It offers Organ Care System (OCS), a portable organ perfusion, optimization, and monitoring system that utilizes its proprietary and customized technology.
TransMedics Group, Inc. (NASDAQ:TMDX) is one of the 10 best organ transplant and diagnosis stocks to buy now, up by more than 85%, as it continues to outperform the market. The stock has been flying high owing to impressive quarterly results, whereby revenues grew by 133% in Q1 to $97 million. Its total revenue in 2023 grew 159% to $241.6 million. According to the Insider Monkey Database, 21 out of 920 hedge funds tracked held stakes in TransMedics Group, Inc. (NASDAQ:TMDX) as of Q1 2024.
Here is what Headwaters Capital Management said about TransMedics Group, Inc. (NASDAQ:TMDX) in its Q2 2024 investor letter:
“Top Contributor: TransMedics Group, Inc. (NASDAQ:TMDX) +104%: TransMedics posted strong first quarter results and raised full year revenue guidance. The results were validation of the Company’s strategy to own and operate an internal logistics fleet to drive increased adoption of their revolutionary organ care system. Market penetration in each organ (liver, heart and lung) remains low and when combined with the potential to grow the overall market should support strong revenue growth for the company for many years.”
7. Novartis AG (NYSE:NVS)
Market Cap as of August 1: $227.25 Billion
Hedge Funds Holding Stakes: 30
Novartis AG (NYSE:NVS) is one of the 10 best organ transplant and diagnosis stocks to buy now as it develops pharmaceuticals, including immunosuppressant drugs, to prevent organ rejection in transplant patients. Its portfolio includes drugs for kidney, liver, and heart transplants.
Novartis AG (NYSE:NVS) is already up by 10% for the year, generating $11.8 billion in sales in 2023, up 12% year over year. According to the Insider Monkey database, the number of hedge funds holding stakes in Novartis AG (NYSE:NVS) increased to 30 in Q1 2024 from 28 as of the fourth quarter of 2023.
In its Q2 2024 investor letter, Aristotle Capital International Equity Strategy commented on Novartis AG (NYSE:NVS) as follows:
“We have been investors in the Swiss pharmaceutical company Novartis AG (NYSE:NVS) for over a decade, having first purchased shares in 2011. During our holding period, the company has undergone significant changes. Vacant (“Vas”) Narasimhan was promoted to CEO in 2018 and, we believe, has positively influenced the company’s culture and helped shift the business more toward innovative medicines. Examples include the sale of Novartis’s consumer (over-the-counter) joint venture; the divestiture of its vaccines and animal health businesses; the spinoff of Alcon, a global leader in the treatment of eye diseases and eye conditions (also an International Equity holding); and most recently, the spinoff of generics manufacturer Sandoz. As part of its portfolio transformation, Novartis has been able to improve its margins and gain share of branded pharmaceuticals. With many catalysts having neared completion, we decided to sell Novartis to fund the purchase of what we believe is a more optimal investment in Roche.”
6. Zimmer Biomet Holdings, Inc. (NYSE:ZBH)
Market Cap as of August 1: $22.86 Billion
Hedge Funds Holding Stakes: 41
Zimmer Biomet Holdings, Inc. (NYSE:ZBH) is one of the top stocks with exposure in the organ and transplant sector. It designs, manufactures, and markets orthopedic reconstructive products like knee and hip products.
Zimmer Biomet Holdings, Inc. (NYSE:ZBH)’s focus on orthopedic and musculoskeletal products makes it one of the 10 best organ transplant and diagnosis stocks to buy now. Even though the stock is down by 9% for the year, it generated a 6.5% increase in sales in 2023 to $7.394 billion. Insider Monkey database indicates that the hedge funds holding stakes in Zimmer Biomet Holdings, Inc. (NYSE:ZBH) dropped to 41 in Q1 2024 from 49 as of the end of 2023.
5. Bio-Rad Laboratories, Inc. (NYSE:BIO)
Market Cap as of August 1: $9.49 Billion
Hedge Funds Holding Stakes: 42
Hercules California-based Bio-Rad Laboratories, Inc. (NYSE:BIO) manufactures and distributes life sciences research and clinical diagnostics products. The company has also made a name for itself in the development of data analysis software for tissue typing and monitoring of transplant recipients. Recently, Bio-Rad Laboratories, Inc. (NYSE:BIO) has inked a strategic partnership with Oconcyte Corporation to develop and commercialize transplant monitoring products.
While Bio-Rad Laboratories, Inc. (NYSE:BIO) is flat for the year, it generated $2.67 billion in sales in 2023. Insider Monkey Database indicates that the number of hedge funds holding stakes in the organ transplant stock dropped to 42 in Q1 2024 from 50 as of the end of 2023.
Longleaf Partners Fund stated the following regarding Bio-Rad Laboratories, Inc. (NYSE:BIO) in its Q2 2024 investor letter:
“Bio-Rad Laboratories, Inc. (NYSE:BIO) – Life sciences company Bio-Rad was the top detractor in the quarter. The company was one of our new investments last year, and so far, we have been early on our expectations for their life sciences business to return to more normal pre-COVID growth trends. We still believe that growth tailwinds are delayed, not derailed, and there have been no new material threats to Bio-Rad’s competitive position since we established our position last year. We are encouraged by the company’s use of a strong balance sheet to repurchase shares opportunistically. Current margins are below peer levels, suggesting potential for improvement, thereby further increasing FCF per share. The market also continues to undervalue their multi-billion-dollar stake in Sartorius. We anticipate Bio-Rad will return to solid growth. Many of its peers are valued as if this growth is already occurring, even in this tough industry environment. While we can’t predict the exact timing, we believe this recovery will happen sooner than the market expects.”
4. Medtronic plc (NYSE:MDT)
Market Cap as of August 1: $103.21 Billion
Hedge Funds Holding Stakes: 54
Medtronic plc (NYSE:MDT) is a medical devices company that creates, produces, and distributes medical devices and treatments to healthcare providers who also find their way into the organ transplant segment. The Cardiovascular Portfolio division specializes in developing implantable cardiac pacemakers, cardioverter defibrillators, and cardiac resynchronization therapy devices.
While Medtronic plc (NYSE:MDT) is down by about 2% for the year, it offers a solid 3.4% dividend yield, more than double the S&P 500 average of 1.4%, affirming its status as one of the 10 best organ transplant and diagnosis stocks to buy right now. As of the end of Q1 2024 a total of 54 out of 920 hedge funds tracked by Insider Monkey database held stakes in Medtronic plc (NYSE:MDT).
3. Becton, Dickinson and Company (NYSE:BDX)
Market Cap as of August 1: $68.22 Billion
Hedge Funds Holding Stakes: 60
Becton, Dickinson and Company (NYSE:BDX) is a medical instruments company that designs and develops medical supplies, devices, and laboratory equipment, some of which are of great use in the organ transplant industry. With a history of pioneering work and significant accomplishments like the Vacationer system for collecting blood and automated systems for culturing blood, Becton, Dickinson and Company (NYSE:BDX) remains at the forefront of healthcare progress by conducting advanced research and development.
Its dedication to enhancing patient results, environmental sustainability, and ethical practices distinguishes it in the market, doubling as a reliable collaborator for medical institutions around the globe. Becton, Dickinson and Company (NYSE:BDX) generated $19.4 billion in sales in 2023, which was up 2.7% year over year. The stock is down by about 2.4% for the year. The number of hedge funds owning stakes in the company remained flat at 60 as of the end of Q1 2024 according to Insider Monkey database.
Here is what Madison Investors Fund said about Becton, Dickinson and Company (NYSE:BDX) in its Q2 2024 investor letter:
“During the quarter, we sold our stake in Becton, Dickinson and Company (NYSE:BDX). Becton is a leading global medical technology and diagnostics company. We admire its dominant market position spanning a vast array of consumable medical products. However, in more recent years, the company has pursued a capital allocation strategy focused a bit more on acquisitions than we’d prefer, and has had operational hiccups in some product lines and geographies. While we believe the company will manage through the issues, we decided to sell to fund more attractive opportunities.”
2. Abbott Laboratories (NYSE:ABT)
Market Cap as of August 1: $191.65 Billion
Hedge Funds Holding Stakes: 62
Given its rich history in transplant diagnostics, Abbott Laboratories (NYSE:ABT) is one of the 10 best organ transplant and diagnosis stocks to buy now. The company has made a name for itself in developing cutting-edge technologies that enhance organ transplant outcomes. Consequently, Abbott Laboratories (NYSE:ABT) remains the go-to company for healthcare providers in transplant medicine across the globe.
Abbott Laboratories (NYSE:ABT) offers transplant assays that assist medical professionals in choosing the best treatment options for patients to prevent adverse reactions and kidney damage, reduce the risk of organ rejection, and keep track of patients not following their treatment plans. While Abbott Laboratories (NYSE:ABT) is down by 4% for the year, it generated $40.1 billion in sales in 2023.
According to the Insider Monkey database, 62 out of 920 hedge funds tracked held stakes in Abbott Laboratories (NYSE:ABT) as of the end of Q1 2024.
In its Q2 2024 investor letter, Diamond Hill Select Strategy commented on Abbott Laboratories (NYSE:ABT) as follows:
“Abbott Laboratories (NYSE:ABT) is a diversified health care company with an extensive portfolio that spans medical devices, pharmaceuticals, nutritionals and diagnostics. With a substantial portion of its revenues generated internationally, emerging markets contribute about 40% of overall sales. We have always liked Abbott’s diverse mix of businesses and its fundamental growth prospects. The management team has consistently demonstrated skill in capital allocation, highlighted by strategic divestitures such as the European generic business in 2014, and significant acquisitions like St. Jude in 2016.”
1. Thermo Fisher Scientific Inc. (NYSE:TMO)
Market Cap as of August 1: $237.34 Billion
Hedge Funds Holding Stakes: 110
Thermo Fisher Scientific Inc. (NYSE:TMO) is the best organ transplant and diagnosis stocks to buy now, according to hedge funds. It provides life sciences solutions, analytical instruments, and specialty diagnostics. Thermo Fisher Scientific Inc. (NYSE:TMO) also offers innovative solutions for transplantation testing, molecular diagnostics, immunoassays, and data management.
Thermo Fisher Scientific Inc. (NYSE:TMO) also offers solutions for HLA labs and transplant clinical teams, supplying dependable biomarkers for solid organ and bone marrow transplants and drug development. The stock is up by 11% for the year. Thermo Fisher Scientific Inc. (NYSE:TMO) generated$42.86 billion in sales in 2023.
A total of 110 hedge funds out of 920 tracked by Insider Monkey Database held stakes in the company as of the end of Q1 2024 from 111 as of the end of Q4 2023.
Polen Focus Growth Strategy stated the following regarding Thermo Fisher Scientific Inc. (NYSE:TMO) in its first quarter 2024 investor letter:
“We increased our positions in Thermo Fisher Scientific Inc. (NYSE:TMO), Visa, Zoetis, Nike, and Abbott Labs. Each of these companies is durable and available at attractive valuations, in our view, for the growth we see ahead. In fact, in the case of Thermo Fisher, Nike, and Abbott Labs, we expect accelerating earnings growth in the back half of 2024 after more difficult earnings growth periods pass for each of these companies. Thermo Fisher and Abbott will finally wind down most of their COVID-19 testing and vaccine-related efforts due to a lack of demand, so these should no longer be revenue growth headwinds.”
Given the expansion and growth in the organ transplant segment, there are tremendous investment opportunities and value to unlock around the 10 best organ transplant and diagnosis stocks to buy now. However, given that the artificial intelligence arms race is just starting, there are under-the-radar AI stocks trading at highly discounted valuations with greater promise for anyone looking to diversify their portfolio. If you are looking for an AI stock that is more promising than the top activist investment plays, check out our report about the cheapest AI stock.
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