We recently published a list of 10 Best Medical Stocks to Buy Now. In this article, we are going to take a look at where Johnson & Johnson (NYSE:JNJ) stands against other best medical stocks to buy now.
Navigating the Healthcare Landscape: Investment Opportunities and Growth Trends
The medical and healthcare industry is one of the largest globally, with a steady demand for products and services due to the biological nature of humans. Stocks like Pfizer Inc. (NYSE:PFE) and Tenet Healthcare Corporation (NYSE:THC) are among the biggest in the world, benefiting from trends that arise during crises like the coronavirus pandemic. Following the pandemic’s rapid spread in 2020, investors were eager to identify the best medical stocks to navigate the global healthcare crisis.
This industry is highly capital-intensive and competitive, encompassing various subsectors, including pharmaceutical companies, healthcare plan providers, medical equipment manufacturers, and hospitals. While healthcare plan providers and pharmaceutical firms often capture consumer attention, hospitals tend to be overlooked, despite their status as publicly traded entities. According to McKinsey, the medical industry’s overall profits are projected to grow at a compound annual growth rate (CAGR) of 4%, increasing from $654 billion in 2021 to $790 billion by 2026. Notably, the hospital sector is expected to grow at a remarkable CAGR of 12.5%, reaching $2 trillion by 2028. Similarly, the pharmaceutical manufacturing segment, valued at $358 billion in 2020, is forecasted to surge to $1.2 trillion by 2030, reflecting a CAGR of 13%.
Over time, medical companies such as Pfizer and Moderna, Inc. (NASDAQ:MRNA), a biotechnology company based in Cambridge, Massachusetts, were among the most sought-after due to their vaccines. On the stock market, Moderna’s shares increased by an astounding 429% between December 2019 and September 2021. This outcome demonstrates that even modest wagers placed at the ideal moment can provide investors from all backgrounds with large returns. During the same period, Pfizer’s stock saw a more moderate 50% gain; nevertheless, the gap in gains is comprehensible given that Pfizer currently has a market value of more than four times that of Moderna, at $155 billion.
Our Methodology
For our methodology, we first sifted through the US pharmaceutical, medical devices, and healthcare ETFs and selected stocks that were weighted the highest. After choosing these stocks, we ranked them based on their total number of hedge fund holders as of Q2 2024.
“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).”
A smiling baby with an array of baby care products in the foreground.
Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 80
Johnson & Johnson (NYSE:JNJ) stands fifth among the best medical stocks to buy now. It is a global healthcare powerhouse that operates across three main segments: pharmaceuticals, medical devices, and consumer health products.
Johnson and Johnson (NYSE:JNJ)’s Regulatory approvals for TREMFYA and RYBREVANT have been obtained. Its position in medical technology and cardiovascular intervention was bolstered by its acquisition of Shockwave Medical in April. Between 2025 and 2030, all segments are projected to increase at a compound annual growth rate of 5-7%. Additionally, approximately 10 assets in the Innovative Medicine area have the potential to produce anticipated operational sales of over $5 billion each.
As of Q2 2024, out of the total number of hedge funds tracked by Insider Monkey, 80 held stakes in the stock with Fisher Asset Management being the largest stakeholder with 7,009,439 shares worth $1,024,499,855. The stock holds a Moderate Buy rating. 14 Wall Street analysts have set a 12-month price target for Johnson & Johnson, averaging $171.83. Forecasts range from a high of $215.00 to a low of $150.00, indicating a potential 6.97% increase from the current price of $160.64.
Overall, JNJ ranks 5th on our list of best medical stocks to buy now. While we acknowledge the potential of JNJ as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than JNJ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.