With the markets seemingly overvalued, anxious investors are looking for growth stocks in sectors that have not disappointed this year. Pharmaceutical and healthcare stocks have been bucking the lethargic trend that has plagued the S&P 500.
Growth Stocks for an Overvalued Stock Market
The first half of 2015 has been an interesting one. Not only is the stock market at or near record highs, it’s been trending in a tight range; one that has provided investors with virtually no gains.
Sadly, for investors, the S&P 500 is up less than one percent year-to-date.
But not all sectors have disappointed so far this year. The Pharmaceutical Index is up 6.8% while Healthcare stocks are up 8.8%.
Of course, not all pharmaceutical companies will provide investors with gains in the second half of 2015. The following three pharma stocks are reasonably valued and could provide investors with great growth opportunities.
Top 3 Pharmaceutical Stocks for the Second Half of 2015
Allergan Inc. (NYSE/AGN)
Sometimes it’s a good idea to follow the leader. Only if you can do it better, though. In March of this year, Activis completed the acquisition of Allergan Inc. (NYSE/AGN) for approximately $70.5 billion. The combined companies created one of the world’s top 10 pharma companies by sales. To confuse things a little, Activis also announced it adopted Allergan Inc. as its new name. (Source: Allergan.com, July 3, 2015.)
The new, bigger, better Allergan Inc. operates in more than 100 countries and features more than 1,000 generics, branded generics, established brands, and over-the-counter (OTC) products. With a market cap of $120 billion, Allergen is the third-largest generic manufacturer in the U.S. and holds a top five leadership position in nearly 20 international markets. Some of the company’s top-selling specialty drugs include “Botox,” “Juvederm,” and “Restasis.”
Celgene Corporation (NASDAQ/CELG)
Celgene is a pharmaceutical company that discovers, develops, and commercializes therapies to treat cancer and inflammatory diseases. The company’s flagship product is “Revlimid,” which is approved in the U.S., Europe, and other markets to treat multiple myeloma (bone marrow cancer). (Source: Celgene.com, July 3, 2015.)
The company’s second-biggest seller, “Vidaza,” is another treatment for MDS; the drug is also approved in Europe to treat leukemia. Other products include “Thalomid,” used to treat patients newly diagnosed with multiple myeloma, in addition to breast cancer treatment “Abraxane” and lymphoma drug “Istodax.”
Currently, there are more than 300 clinical trials at major medical centers using compounds from Celgene.
Gilead Sciences Inc. (NASDAQ/GILD)
Gilead Sciences Inc. (NASDAQ/GILD) is a pharmaceutical company that has seen its revenues grow at a compound annual growth rate of 28.8% over the last five years.
The company’s products and pipeline of investigational drugs include treatments for HIV/AIDS, liver diseases, cancer, inflammatory and respiratory diseases, and cardiovascular conditions. (Source: Gilead.com, July 3, 2015.)
Its portfolio of 19 marketed products includes a number of category firsts, including complete treatment regimens for HIV and chronic hepatitis C infection available in a single pill.
Today, the company’s research and development efforts include more than 400 ongoing and planned clinical studies.