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In this article, we discuss 10 best medical stocks under $20. If you want to see more stocks in this selection, check out 5 Best Medical Stocks Under $20.
The healthcare industry has undergone a significant restructuring in the wake of the COVID-19 pandemic. There were multiple new healthcare trends in 2022 that have a lasting impact on the industry. These include telemedicine, electronic health records, medical internet of things (IoT), remote monitoring using real-time health data and metrics, artificial intelligence, and improved workflows in the industry.
Concerned investors are turning over every leaf in the capital markets while they look for stocks that have a combination of high growth potential and a history of surviving during economic downturns. Health care is often considered an “Energizer bunny” sector, with sustainable revenues from continuously resilient demand. This is because the US has strong healthcare demand from aging baby boomers, and more than 10,000 of them turn 65 years old every day. In the United States, approximately 20% of the gross domestic product is generated from the healthcare industry.
According to McKinsey & Co, the healthcare sector’s EBITDA rose 5% annually between 2017 and 2019, and was flat during 2020 to 2021. McKinsey expects the sector EBITDA, a primary measure of earnings strength, to grow 6% annually from 2021 through 2025, generating an extra $31 billion in profits.
Some of the best medical stocks to invest in include AbbVie Inc. (NYSE:ABBV), UnitedHealth Group Incorporated (NYSE:UNH), and Abbott Laboratories (NYSE:ABT). However, we discuss medical stocks under $20 in this article.
Our Methodology
We selected medical stocks priced under $20 so that beginner investors with limited money can venture into the healthcare sector as well. The following stocks were chosen based on positive analyst coverage, strong business fundamentals, and future growth potential. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022.
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Best Medical Stocks Under $20
10. Abcam plc (NASDAQ:ABCM)
Number of Hedge Fund Holders: 9
Share Price as of December 8: $15.67
Abcam plc (NASDAQ:ABCM) incorporated in 1998 and is headquartered in Cambridge, the United Kingdom. It is a life science company that specializes in identifying, developing, and distributing reagents and tools for scientific research, diagnostics, and drug discovery end-markets.
On November 9, NanoString Technologies, Inc. (NASDAQ:NSTG) and Abcam plc (NASDAQ:ABCM) announced the expansion of their collaboration to advance spatial multi-omics research. Under this agreement, both companies will co-market Abcam antibodies for NanoString's high-plex spatial multi-omic solutions.
Investment advisory RBC Capital on September 14 raised the firm's price target on Abcam plc (NASDAQ:ABCM) to 2,200 GBp from 1,700 GBp and maintained an Outperform rating on the shares. Analyst Charles Weston issued the ratings update.
According to Insider Monkey’s third quarter database, Abcam plc (NASDAQ:ABCM) was part of 9 hedge fund portfolios at the end of Q3 2022, with collective stakes worth $56.8 million, compared to 7 funds in the prior quarter worth $40 million. Rock Springs Capital Management held the leading position in the company, consisting of 2 million shares worth $30.5 million.
In addition to AbbVie Inc. (NYSE:ABBV), UnitedHealth Group Incorporated (NYSE:UNH), and Abbott Laboratories (NYSE:ABT), Abcam plc (NASDAQ:ABCM) is one of the best medical stocks to consider.
9. Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI)
Number of Hedge Fund Holders: 20
Share Price as of December 8: $13.10
Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) is a California-based life sciences company that offers drug therapies, diagnostics, novel vaccines, and research on human diseases in the United States and internationally. It is one of the best medical stocks to invest in.
On December 6, RBC Capital analyst Conor McNamara initiated coverage of Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) with an Outperform rating and a $22 price target. The analyst views Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) as a "clear winner exiting the pandemic." Demand for its CleanCap product, a vital component utilized in the Pfizer COVID vaccine, rose at the beginning of the pandemic with "long-lasting" financial and strategic benefits, the analyst told investors. He believes Maravai's present valuation does not match the company's growth opportunity in the near, medium, or long-term.
According to Insider Monkey’s data, 20 hedge funds were bullish on Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) at the end of September 2022, compared to 19 funds in the earlier quarter. Select Equity Group is the largest stakeholder of the company, with 16.45 million shares worth $420 million.
Here is what ClearBridge Mid Cap Strategy has to say about Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) in its Q3 2021 investor letter:
“The Strategy’s health care holdings were also a positive contributor during the quarter. The need for vaccines and vaccine-manufacturing inputs were a catalyst for the biotechnology and research & development industries. For instance, Maravai LifeSciences produces the chemicals needed in the development and stabilization of Messenger RNA (mRNA) for a growing market of disease research and treatments – expected to produce recurring revenue at high margins. In addition to being financially beneficial, the company’s role in helping manufacture the COVID-19 vaccine has accelerated developments within non-COVID mRNA vaccines and therapeutics expected to come to market over the next decade.”
8. Pacific Biosciences of California, Inc. (NASDAQ:PACB)
Number of Hedge Fund Holders: 21
Share Price as of December 8: $9.58
Pacific Biosciences of California, Inc. (NASDAQ:PACB) is a California-based company that designs, develops, and manufactures sequencing systems to resolve genetically complex problems. On November 16, Canaccord analyst Kyle Mikson raised the price target on Pacific Biosciences of California, Inc. (NASDAQ:PACB) to $14 from $12 and reiterated a Buy rating on the shares. The analyst attended the company’s investor day where he appreciated its long-term strategy, including the growing addressable market and penetration, its expanding product portfolio, and achievable financial targets.
According to Insider Monkey’s third quarter database, 21 hedge funds were long Pacific Biosciences of California, Inc. (NASDAQ:PACB), with collective stakes worth $277 million, compared to 18 funds in the prior quarter worth $226.5 million. Cathie Wood’s ARK Investment Management is the largest position holder in the company, with 28.7 million shares worth $166.5 million.
Here is what DEVON Equity Management has to say about Pacific Biosciences of California, Inc. (NASDAQ:PACB) in its Q2 2021 investor letter:
“As a final word on Sequencing – we established a position in Pacific Biosciences (PACB US) during the quarter. PacBio is the leader in Long Read Sequencing (Illumina is dominant in Short Read). The Long Read market is far less developed than short read, but our continued research into the genomic sequencing field increased our confidence in the commercial viability for Long Read Sequencing in the coming years. We will discuss the investment case for PacBio in more detail in a future letter.”
7. Haleon plc (NYSE:HLN)
Number of Hedge Fund Holders: 21
Share Price as of December 8: $7.80
Haleon plc (NYSE:HLN) was incorporated in 2021 and is headquartered in Brentford, the United Kingdom. The company engages in the research and development, manufacture, and sale of various consumer healthcare products in North America, Europe, the Middle East, Africa, Latin America, and the Asia Pacific. Its portfolio of brands include Panadol, Voltaren, Advil, Otrivin, Theraflu, Sensodyne, Polident, Parodontax, and Centrum. Haleon plc (NYSE:HLN) is one of the best medical stocks to consider.
On December 7, Barclays analyst Iain Simpson upgraded Haleon plc (NYSE:HLN) to Overweight from Equal Weight with a price target of 360 GBp, up from 298 GBp, after a U.S. federal judge rejected the scientific evidence behind more than 5,000 lawsuits claiming heartburn drug Zantac can cause cancer. Haleon plc (NYSE:HLN) is "investable again" now that the Zantac situation is "substantially derisked," the analyst told investors in a research note.
According to Insider Monkey’s Q3 data, 21 hedge funds were bullish on Haleon plc (NYSE:HLN), with collective stakes worth $305.3 million.
6. Ginkgo Bioworks Holdings, Inc. (NYSE:DNA)
Number of Hedge Fund Holders: 24
Share Price as of December 8: $1.80
Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) is a Massachusetts-based company that develops a platform for cell programming, which is used to program cells to allow biological production of novel therapeutics, food ingredients, and chemicals derived from petroleum. Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) is one of the best medical stocks priced under $20. On December 8, Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) launched Ginkgo Enzyme Services, which helps in the development and discovery of novel enzyme activity through the optimization of enzyme function and large scale manufacturing.
On November 28, Berenberg analyst Gaurav Goparaju initiated coverage of Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) with a Buy rating and a $6 price target. Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) is leveraging its platform to industrialize synthetic biology at scale across diverse end-markets and has "the only scaled horizontal platform in the space," said the analyst. He believes the company is "well-positioned to disrupt cell programming across industries."
According to Insider Monkey’s data, 24 hedge funds were long Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) at the end of September 2022, compared to 29 funds in the prior quarter. The collective stakes held by elite funds in Q3 increased to $956 million from $575.7 million in Q2 2022.
Like AbbVie Inc. (NYSE:ABBV), UnitedHealth Group Incorporated (NYSE:UNH), and Abbott Laboratories (NYSE:ABT), Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) is one of the best medical stocks favored by smart investors.
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Disclosure: None. 10 Best Medical Stocks Under $20 is originally published on Insider Monkey.
