5 Best Healthcare Stocks to Buy in December 2021

The healthcare sector has been in focus as the world continues to fight the COVID-19 pandemic. Some of the healthcare stocks have seen some upwards momentum after the emergence of the omicron variant which was first detected by South Africa.

What’re the five best healthcare stocks that you can buy in December 2021?

1. CRISPR Therapeutics (NYSE: CRSP)

Gene editing company CRSP looks a good healthcare stock to buy in December. The stock recently fell to a 52-week low but is trading sharply higher in today’s price action. Gene editing could be the next big thing in the healthcare industry and Cathie Wood of ARK Invest, who runs a genomics ETF, sees it as a trillion-dollar opportunity. CRSP is among the holdings of her ETF. Notably, while Wood’s investing style and ETFs have been under pressure this year, she has an eye for innovative and disruptive companies.

Gene editing could be the next big thing in healthcare

After the sharp fall, CRSP stock looks like a good buy in December. Wall Street analysts also share Wood’s optimism towards CRSP and its median target price of $160 implies an upside in excess of 100% from these levels. The stock even trades 13% above the street low target price of $90. Wall Street analysts have a consensus buy rating on the stock and 16 of the 24 analysts covering it have rated it as a buy. Seven analysts have a hold rating while one analyst has rated it as a sell.

To be sure, CRSP is a risky healthcare stock to buy as it is still developing products. However, given the massive market opportunity for gene editing, it is among the healthcare stocks that should be on your radar in December 2021.

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2. Pfizer (NYSE: PFE)

Just when it looked that the boost from COVID-19 vaccine sales would soon taper away, the emergence of the omicron variant has put companies like Pfizer back in focus. The company’s COVID-19 vaccine is the only one to have received full FDA approval. The FDA has also extended the eligibility of Pfizer booster shot to all adults. More countries are also expected to push for booster shots. With the COVID-19 pandemic showing no signs of going away, booster shots might become a hard reality.

PFE is a healthcare stock to play vaccines

PFE is among the best healthcare stocks to play the COVID-19 vaccination story. BMO is among those brokerages that see value in PFE stock. Last month, analyst Evan David Seigerman initiated coverage of Pfizer stock with an outperform rating and $60 target price. “COVID-19 success not only drives near-term cash flow … but also established the mRNA vaccine platform to expand into other disease, such as flu,” he said in his note.

The brokerage also pointed to Pfizer’s strong financial position and attractive valuations. It also emphasized its over 3% dividend yield. It also expressed optimism over its strong product pipeline including many products in the late stages of clinical trials.

BMO expects as many as 25 new product launches from Pfizer by 2025. A strong product pipeline, attractive dividend yield, and strong medium-term earnings from the sales of COVID-19 shots make PFE among the best healthcare stocks for December.

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3. LHC Group (NYSE: LHCG)

LHC Group provides in-home healthcare services and looks like a niche healthcare stock. The company has announced several acquisitions this year that would help propel its growth which has been somewhat stagnating. The stock is down 40% for the year and looks like a good buy at these prices.

LHCG is a play on the in-home healthcare market

The demand for in-home healthcare is expected to be strong and LHCG is among the best stocks to play the theme. The stock looks reasonably valued with an NTM (next-12 months) PE of just above 20x. Wall Street analysts are also bullish on the stock and its median target price of $182 is a premium of almost 44% over current prices.

Overall, LHCG looks like an attractively priced niche healthcare stock to buy in December 2021.

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4. Intuitive Surgical (NYSE: ISRG)

With a YTD gain of 26%, ISRG stock is outperforming the S&P 500. Wall Street analysts see more upside in the stock and its median target price of $370 is a 9.1% upside over current prices.

The stock trades at an NTM PE of 61x which might appear high for a healthcare stock. However, given the strong moat that its surgical robot business has, the valuations don’t appear too steep. The demand for robotic equipment in clinical surgeries is expected to grow at a brisk pace which makes ISRG among the best healthcare stocks to buy in December.

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5. Teladoc Health (NYSE: TDOC)

Teladoc Health is another niche healthcare stock that looks a good buy in December 2021. The stock has fallen sharply this year amid the general sell-off in stay-at-home stocks. The company’s growth rate has been coming down, in line with other stay-at-home winners. However, the long-term growth trajectory for the company looks strong.

Cathie Wood is among those who are bullish on Teladoc Health stock and has been loading up on TDOC after the recent fall. Wells Fargo estimates the company’s total addressable market at $120 billion and forecasts an organic annualized revenue growth in excess of 20% for the next five years.

Wells Fargo finds TDOC a good healthcare stock

According to Wells Fargo TDOC an attractive healthcare stock. “While this ‘slowdown’ may be giving investors pause, we think the pace of member growth over the past few years was clearly not going to be sustainable. That said, we believe that TDOC still has significant opportunity (~65M) to expand membership with existing health plan relationships,” said Analysts Stephen Baxter and Stan Berenshteyn in their note in October.

If you want to play the digitization of the healthcare industry, TDOC is one stock that should be in your portfolio. While the stock has been weak amid the sector rotation from stay-at-home names, it looks at attractive buy at these prices.

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