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Don't Overlook These Highly Ranked Medical Stocks as Markets Rise

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With healthcare services being essential many medical stocks are often seen as a defensive hedge in times of economic uncertainty but can be overlooked when markets are doing well.

Keeping this scenario in mind, today’s better-than-expected CPI data for May sparked a rally among broader indexes and amid the inflationary optimism, investors will still want to consider several top medical stocks that were added to the Zacks Rank #1 (Strong Buy) list this week.

Medical-Outpatient and Home Healthcare

Currently, the Zacks Medical-Outpatient and Home Healthcare Industry is in the top 13% of over 250 Zacks industries with RadNet (RDNT - Free Report)  and U.S. Physical Therapy (USPH - Free Report)  being two standouts.

As prime beneficiaries of their strong business environment, RadNet is a leading national provider of high-quality diagnostic imaging for outpatient services while U.S. Physical Therapy is the largest publicly traded operator of outpatient physical and occupational therapy clinics.

Due to their steady expansion, RadNet and U.S. Physical Therapy’s stock have become long-term winners and the positive trend of rising earnings estimate revisions suggests their blazing historical performances could continue. Notably, RadNet’s stock has soared +88% year to date with U.S Physical Therapy shares up a respectable +3%. More astonishing, over the last decade, RadNet has now climbed +765% with U.S. Physical Therapy climbing +200% which has impressively topped the S&P 500’s +173%.

Zacks Investment Research
Image Source: Zacks Investment Research

Medical-Products

Although the Zacks Medical-Products Industry is currently in the bottom 34% of all Zacks industries, Haemonetics (HAE - Free Report)  and Lantheus  are two leaders in the space that make the case for being undervalued. 

Furthermore, the decade performance of these two medical leaders is stellar as well with Lantheus skyrocketing over +1,100% as a radiopharmaceutical company that helps clinicians highlight better patient outcomes for disease while Haemonetics is up +155% as a blood management solutions provider. With both expected to post double-digit EPS growth in fiscal 2024, Lantheus has spiked +32% YTD with Haemonetics only up +2% but looking poised for more upside.  

Indicative of such is that Haemonetics trades at a reasonable 18.2X forward earnings multiple considering its attractive growth prospects, and in this regard, the strong performance of Lantheus could very well continue as its stock still appears to be cheap with a forward P/E of 11.4X compared to the industry average of 23.6X and the S&P 500’s 21.8X.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

With earnings estimate revisions on the rise for these top medical stocks, they certainly shouldn’t be overlooked given their blazing historical performances. To that point, their expansion has been driven by the essentiality of their business operations which should make them viable investments for 2024 and beyond.


See More Zacks Research for These Tickers


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Haemonetics Corporation (HAE) - free report >>

RadNet, Inc. (RDNT) - free report >>

U.S. Physical Therapy, Inc. (USPH) - free report >>

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