5 Best Healthcare Stocks To Buy Now According To Motley Fool’s 1623 Capital

1. Medtronic plc (NYSE:MDT)

1623 Capital’s Stake Value: $5.32 million

Percentage of 1623 Capital’s 13F portfolio: 2.66%

Number of Hedge Fund Holders: 54

Medtronic plc (NYSE:MDT) was the largest healthcare stock holding of 1623 Capital in the first quarter. The fund’s stake in MDT consisted of 48,000 shares priced at $5.32 million, accounting for a 2.66% slice of its total portfolio.

With operations in more than 140 countries around the world, Medtronic plc (NYSE:MDT) is a medical device company. It has posted increasing dividends for 44 years in a row, and has a $0.68 per share quarterly dividend, along with an impressive 3.07% yield as of July 12.

On the back of supply chain issues and latest quarterly results falling below estimates, many Wall Street analysts recently turned bearish on Medtronic plc (NYSE:MDT) shares. Wolfe Research analyst Mike Polark gave the firm an ‘Underperform’ rating in July, whilst Atlantic Equities analyst James Mainwaring downgraded Medtronic plc (NYSE:MDT) to ‘Neutral’ from ‘Overweight’ with a price target of $105, down from $125. He noted that the company “continues to be stuck in a negative earnings revision cycle” following its latest quarterly miss, despite management trying to post conservative guidance in recent quarters.

54 hedge funds from the Q1 database of Insider Monkey owned positions in Medtronic plc (NYSE:MDT), with a collective price tag of $1.98 billion. This is down from 55 hedge funds with $2.78 billion worth of stakes in the firm a quarter earlier. Diamond Hill Capital held a position in Medtronic plc (NYSE:MDT) exceeding $456 million, making it the firm’s largest shareholder in the first quarter of 2022.

Investment firm Polen Capital discussed the market position of Medtronic plc (NYSE:MDT) in its Q1 2022 investor letter, stating:

“Ireland-based Medtronic is a leading health care company focused on supplying many important life-saving devices like pacemakers, defibrillators, and insulin pumps. This is another company with attractive pricing power and a business model that can hold up well during inflationary periods. Medtronic has increased market share across almost 70% of its portfolio since the start of the pandemic, which is a higher percentage than even before the pandemic. With growth-oriented companies falling out of favor over the quarter, the stock’s relatively discounted valuation (at approximately 19x earnings) also bolstered its performance.”

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