3 healthcare shares I want to buy right now – The Motley Fool

You may have noticed that health care generally does not perform well in 2019. SPDR Fund for Health Care (NYSEMKT: XLV) which traces The results of the S&P 500 shares in this sector is far behind the broader market indices this year.

But I think this underperformance will only be temporary. All of some healthcare stocks look like bargains right now. Three standing near the top of the list in my opinion are Illumina (NASDAQ: ILMN) Teladoc Health (NYSE: TDOC) and Vertex Pharmaceuticals (NASDAQ : VRTX) . Here's what makes them stand out.

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1[ads1]. Illumina

Some may look at the Illumina's slow growth rate in the first quarter and conclude that the genomic sequencing pioneer is out of steam. My view is that it only breathes before the next wave of growth.

The management expects growth of close to 14% and an adjusted earnings per share (EPS) of nearly 17% in 2019. The catch is so great This growth will come in the latter half of the year, as several major population genomic measures fluctuate. In addition, their customers tend to buy more as their fiscal year goes down.

More importantly, Illumina should take advantage of several long-term growth opportunities. Consumer ethics products such as those offered by Ancestry and 23andMe – both Illumina customers – started exclusively with genealogy and were primarily targeted at the US market. It changes, but: They now place greater emphasis on health-related genetic properties, and take greater interest in international sales.

Population work involving genomic sequencing of hundreds of thousands of people is gaining momentum worldwide. There is also a greater focus on genetic research in rare and undiagnosed diseases than ever before.

Perhaps the most important opportunities for Illumina are, however, in cancer research and treatment. The promise of liquid biopsies – blood tests to detect cancer – is huge. The emergence of personalized medicine tailored for individuals' genetic profiles, especially in the treatment of cancer, offers yet another large potential growth market for Illumina.

2. Teladoc Health

Teladoc Health's growth does not decrease at all. The virtual healthcare provider delivered 43% during the first quarter, with a strong increase in membership and higher utilization of services.

Management believes that the rest of the year will look very good, and proves revenue growth at 37% in 2019. And while Teladoc Health is not yet profitable, it is mainly because it continues to invest heavily in expanding its business.

There has already been a lot of expansion. Through a number of acquisitions, Teladoc now has operations all over the world, and is a world leader in virtual care. The customer base includes 40% of the Fortune 500, plus thousands of smaller organizations.

Teladoc Health appears to be ready for significant growth as aging populations globally drive the demand for healthcare higher. Telemedicine offers a cheaper way to deliver some of these services. Teladoc's industry management and its wide range of services should give it a solid competitive advantage by leveraging this opportunity.

3. Vertex Pharmaceuticals

I have previously claimed that Vertex Pharmaceuticals is the best biotechnology on the market. I still think that's true. Why? Let me count the roads.

Vertex basically has a monopoly on the treatment of the underlying cause of cystic fibrosis (CF). It currently has three approved drugs on the market that are taken together by about 18,000 patients. But there are 39,000 patients worldwide who can benefit from Vertex's current drugs, giving the company a great opportunity. When Vertex wins approvals for the treatment of younger patients, it expects the addressable patient population to grow to around 44,000.

But Vertex will soon archive the approval of a triple combo for CF which will increase the number of target patients to 68,000. I fully expect the FDA to approve this new therapy next year and pave the way for Vertex sales to explode.

And there's more. Vertex joined with CRISPR Therapeutics (NASDAQ: CRSP) to develop a gene-replicating therapy targeting the rare blood disease beta-thalassemia, as well as sickle cell disease. It has a promising painkiller that is to move on to late stage clinical testing in the not too distant future. And it also exploits its expertise in CF to develop medicines for other rare genetic diseases, including alpha-1 antitrypsin (AAT) deficiency.

They have in common

These three companies have two important things in common, except that they are in health care.

First, they all like strong moats. Illumina, Teladoc Health and Vertex are leaders in their respective niches. None of its competitors claim anywhere near the market share that these companies have.

Second, each has several ways of growth. Illumina can look forward to genomic sequencing opportunities in several markets. Teladoc continues to expand the types of virtual services it offers. Vertex branches beyond CF.

As some warehouse, these three faces risk some. But I like growth prospects for Illumina, Teladoc and Vertex, and I like their business models. Not only do I want to buy these health services right now, I already own all three of them, and I expect they will continue to be winners in the long term.