The global economic recovery can be attributed in large measure to the efforts of several healthcare companies in their race to develop a COVID-19 vaccine. With governments now pouring billions of dollars to further improve the healthcare industry, and companies in the sector focusing on meeting the healthcare needs of an aging population, the industry’s prospects look bright. So, we think quality healthcare stocks Hologic (NASDAQ:HOLX), Owens & Minor (OMI), and Amneal (AMRX), which are currently trading at discounts to their peers, should deliver solid returns in the coming months.The healthcare industry has been the beneficiary of immense investor attention because extensive vaccination drives are helping some of the major economies reopen sooner than expected. This is evidenced by the Vanguard Health Care Index Fund ETF Shares’ (VHT) 6.4% gains over the past month compared to the SPDR S&P 500 Trust ETF’s (SPY) 3.2% returns.
Considering current market volatility, which is partly due to higher-than-expected inflation projected by the Federal Reserve, investor’s interest in the healthcare sector is expected to grow further because it is considered relatively stable in terms of performance given the largely inelastic demand for healthcare products. Furthermore , governments worldwide are spending billions to improve the healthcare industry, and companies in this space are innovating quickly to address the growing healthcare needs of an aging population.
With these factors in mind, we think it could be wise to bet on the shares of quality healthcare companies Hologic, Inc. (HOLX), Owens & Minor, Inc. (OMI), and Amneal Pharmaceuticals, Inc. (NYSE:AMRX). These names look undervalued at their current price levels.