We recently compiled a list of 10 oversold healthcare stocks to invest in. In this article, we'll take a look at how Moderna, Inc. (NASDAQ:MRNA) stands compared to other oversold healthcare stocks.
Investing in healthcare stocks during economic downturns is generally considered defensive. This is because people typically do not reduce their use of prescription drugs and other important health services even during economically difficult times. National health spending is projected to reach an estimated $4.8 trillion in 2023 and grow at an annual rate of 5.6% from 2027 to 2032, according to the Centers for Medicare and Medicaid Services (CMS).
The healthcare sector is growing in the United States. According to recent estimates, the country's health spending will increase by 7.5% in 2023, outpacing the same year's nominal GDP growth rate. A record 93.1% of Americans now have health insurance, which fueled a surge in health spending last year. U.S. national health spending is expected to increase by an average of 5.6% from 2023 to 2032, faster than the projected GDP growth rate of 4.3%.
Moreover, this industry is rapidly growing on a global scale. Healthcare profits are expected to grow at a compound annual growth rate (CAGR) of 7%, from $583 billion in 2022 to more than $800 billion by 2027, according to a recent McKinsey forecast. However, labor shortages and rising inflation continued to weigh on business in 2023. , 2024 is expected to be a year of recovery due to a favorable risk-reward environment in the sector. According to the American investment firm, the events of 2023 have created an attractive opportunity for investors to participate in the healthcare industry.
Investment in AI in healthcare is growing faster than the technology industry, with $2.8 billion invested in AI healthcare companies in 2024 and expected to exceed $11 billion by year-end. . According to a report from Silicon Valley Bank, a quarter of all healthcare spending now goes to AI-driven companies. Deloitte's 2024 Global Healthcare Sector Outlook highlights high investor confidence, with $31.5 billion in private equity funding raised between 2019 and 2022. AI is expected to save $360 billion in U.S. healthcare over the next five years by improving patient care, diagnosis, treatment, and medical management.
As 2024 progresses, optimism in the healthcare industry is growing. Financial experts expect earnings to improve this year despite the poor performance in 2023. BlackRock's 2024 forecast says the healthcare industry is in a “favorable risk-reward environment,” and also notes that last year's poor performance provides an attractive starting point for investors. With this in mind, let's take a look at oversold stocks in the healthcare sector.
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Our methodology uses a stock screening tool to select healthcare stocks with an RSI below 30, medium market capitalization, and high institutional ownership. We then ranked stocks based on the total number of hedge fund holders in the Insider Monkey database for Q3 2024.
Why are we interested in stocks that hedge funds invest in? The reason is simple. Our research shows that by mimicking the top stock picks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 percentage points (Learn more ).
A scientist proudly displays a vaccine surrounded by vials and beakers in a modern laboratory.
Number of hedge fund holders: 34 people
Moderna, Inc. (NASDAQ:MRNA) is a biotechnology company specializing in messenger RNA (mRNA) therapeutics and vaccines. Create synthetic mRNA to instruct cells to make proteins to prevent or treat various diseases. In particular, we focus on mRNA-based solutions for infectious diseases, immuno-oncology, rare diseases, and autoimmune diseases.
Moderna, Inc. (NASDAQ:MRNA) plans to file for approval of three new products this year: a novel coronavirus/influenza vaccine, a next-generation coronavirus disease (COVID-19) vaccine, and an RSV vaccine for adults ages 18-59. I am doing it. While the RSV vaccine rollout and positive EMA opinion boosted investor confidence, the company also reported positive Phase III results for its combined influenza/COVID-19 vaccine and collaborations with BARDA and Mitsubishi Tanabe Pharma. are. To save $1.1 billion annually by 2027, Moderna will discontinue five R&D programs and aim to break even by 2028 while continuing clinical trials for mRNA-1647 and mRNA-3705. aim.
In Q3 2024, Moderna, Inc. (NASDAQ:MRNA) reported EPS of $0.03 and achieved net income of $13 million, reversing a loss of $3.6 billion in Q3 2023. The company's revenue reached $1.9 billion due to the strong COVID-19 pandemic. Vaccine sales following U.S. regulatory approval of updated vaccines. The company reduced operating expenses by $500 million year over year through productivity and cost efficiency improvements in manufacturing, research and development, and sales and management. Additionally, cost of goods sold decreased 77% to $514 million, improving profitability, reflecting strategic restructuring and lower inventory write-downs.
Baron Health Care Fund commented on Moderna, Inc. (NASDAQ:MRNA) in its Q1 2023 investor letter:
“Moderna, Inc. (NASDAQ:MRNA) is a leader in the emerging field of mRNA-based vaccines and therapeutics and one of the three leading manufacturers of COVID-19 vaccines. Stocks fell during the quarter. Investing in what the booster market will look like as the coronavirus emerges from a pandemic situation and becomes increasingly commercial (rather than government-funded). Looking beyond COVID-19, we believe Moderna has increased uncertainty in the biopharmaceutical industry, from infectious disease vaccines to oncology. We believe it has the potential to have a disruptive impact and will continue to be a shareholder.”
Overall, MRNA ranks #6 on our list of oversold healthcare stocks to invest in. While we recognize MRNA's potential as an investment, we believe AI stocks are more likely to deliver higher returns and do so in the short term. time frame. If you're looking for AI stocks with better prospects than MRNA, but trading at less than 5x earnings, check out our report on the cheapest AI stocks.
Read next: 8 Best Widemot Stocks to Buy Now and 30 Most Important AI Stocks, According to BlackRock
Disclosure: None. This article was originally published on Insider Monkey.
