UBS’ Top Quant Stocks In AI, IT, Healthcare & Other Sectors: Top 33 Stocks In All Sectors

9. Cardinal Health, Inc. (NYSE:CAH)

Number of Hedge Fund Investors In Q2 2024: 39

Sector: Healthcare

Cardinal Health, Inc. (NYSE:CAH) is a diversified healthcare products company that sells a variety of products and equipment such as medicines and surgical supplies. This provides it with the key advantage of having an insulated business model that is less susceptible to economic downturns. At the same time, its presence in the pharmaceutical and tertiary industries also means that Cardinal Health, Inc. (NYSE:CAH) is dependent on its partnerships with benefits providers. This was evident in April when the shares dropped by 5% after word surfaced that the firm would lose out on OptumRx pharmacy contracts. However, despite the loss of a business that at one point accounted for 13% of its revenue, Cardinal Health, Inc. (NYSE:CAH)’s shares are up 13.17% year to date. This is partly due to the firm’s push in the specialty market, which is known for high demand and pricey drugs to treat cancer and other ailments. Cardinal Health, Inc. (NYSE:CAH) bought community cancer center Oncology Network for $1.12 billion in cash in September to grow its specialty market presence. Its latest quarterly revenue of $52.3 billion also beat analyst estimates of $50.9 billion to send the stock soaring by 7%.

Cardinal Health, Inc. (NYSE:CAH)’s management shared its take on the oncology-driven specialty business during the Q4 2024 earnings call:

“As expected, we are leveraging specialty networks’ demonstrated capabilities in neurology, the largest area of its fully integrated model, to enhance our offering in oncology. The fully integrated specialty networks market offering is directly aligned with our strategy for Navista, our oncology practice alliance providing advanced technology and services.

Over the course of the last year, we’ve built a world-class Navista team consisting of industry experts, defined our offerings and go-to-market strategy, and completed our foundational technology build. The Navista team is engaging with an active pipeline of customers across the oncology marketplace, demonstrating to community oncologists how Navista can help them remain independent for good. Upstream with manufacturers, our leading specialty 3PL has continued its track record of growing faster than market with nearly 20% growth during the year. We’re leveraging these services as part of our comprehensive offering that further facilitates the commercialization and delivery of critical cell and gene therapies to providers and patients. Our new advanced therapy solutions innovation center features a specialized deep frozen storage suite to handle the logistical challenges associated with cell and gene therapies.”