Last year, medical stocks were heavily in the spotlight due to the novel coronavirus pandemic. This was especially true for companies that were in the race for a coronavirus vaccine. However, investors shouldn’t be afraid to look beyond Covid-19 vaccinations. There are plenty of other growth opportunities to be found among medical stocks. Some are related to Covid-19 or have had a boost because of the pandemic, while some have remained focused on other areas altogether.

From the search for effective cancer treatments, to Covid-19 testing and the growing trend of remote assessment, here are seven companies that are worthy of consideration:

  • Amedisys Inc (NASDAQ:AMED)
  • Cardiff Oncology Inc (NASDAQ:CRDF)
  • Fulgent Genetics Inc (NASDAQ:FLGT)
  • Guardion Health Sciences Inc (NASDAQ:GHSI)
  • Natera Inc (NASDAQ:NTRA)
  • Owens & Minor, Inc. (NYSE:OMI)
  • Teladoc Health Inc (NYSE:TDOC)

Each of these medical stocks scores an “A” rating in Portfolio Grader. Each offers proven potential for significant growth. Let’s take a closer look at what makes them worth a look today.

Healthcare stocks - 7 Healthcare Stocks to Buy With the Sector Under Scrutiny

Medical Stocks to Buy: Amedisys (AMED)

Amedisys is a big player in the U.S. home healthcare and hospice industries. That home health care aspect of its business is set to be a big beneficiary of the pandemic.

One of the things the pandemic did was to expose the state of long-term care facilities, or nursing homes. Residents became one of the largest fatality groups as outbreaks tore through the buildings. Last fall, the New York Times called nursing homes “death pits.”

Over the past decade, there was already a movement beginning, favoring home healthcare over nursing homes. Medicaid began to shift funding away from nursing homes and toward home healthcare starting in 2013. With the horrific images of nursing homes during the pandemic, it’s expected that home healthcare is going to become a much more popular option for families. 

AMED stock has been in growth mode since 2014, but that has really accelerated over the past three years. Shares are up 430% since early February 2018. Over the past 12 months, AMED has tallied a gain of 58%. Expect that growth to continue as home-based care continues to gain favor over traditional nursing homes. 

Cardiff Oncology (CRDF)

Cardiff Oncology describes itself as “a clinical-stage company with the singular mission of developing new treatment options for cancer patients.”

The biotech and pharmaceutical world has been largely focused on Covid-19 for the past year. However, cancer has long been a deadlier and more costly medical scourge. Last year, in the U.S. alone, there were an estimated 1,806,590 new cancer cases and 606,520 deaths attributed to various cancers. In 1971, President Nixon declared a national “war on cancer.”

The search for cancer treatments never ceases, and the market is massive — not just in the U.S., but globally. As with Covid-19 vaccines, the success (or failure) of trials for cancer treatments can make for a rocky ride for investors in biotech companies. However, the potential payoff of a success can make it all worthwhile. Cardiff Oncology is focused on treatments for colorectal cancer, prostate cancer and leukemia.

CRDF stock began to show signs of life last summer, on news that its treatment for KRAS-mutated metastatic colorectal cancer was granted fast-track designation by the Food and Drug Administration. When the results of phase Phase 1b patients was released on Jan. 15, it wasn’t quite as clear-cut positive as investors had hoped. CRDF stock dropped over 40% in matter of two days.

That’s how it goes with biotech stocks. Some investors pile on based on hype, then jump ship when miraculous cures fail to materialize immediately. Cardiff Oncology’s trial results were still promising and it has other treatments in the pipeline. You could look at the mid-January drop as an opportunity to pick up CRDF shares at a discount.

Fulgent Genetics (FLGT)

Fulgent Genetics is one of my favorite stocks on this list because this is a company with serious momentum. It began in 2019, with growth for that year of over 230% on the strength of its affordable genetic testing.

In 2020, FLGT stock closed the year at $52.10, for an impressive 301% gain. Now trading over $140, FLGT shares have posted triple-digit growth already in 2021. The big news has been the company’s suite of Covid-19 tests, including rapid-turnaround and antibody and molecular testing. The company is now offering an FDA-approved, at-home self coronavirus test for $119.

There is no arguing the fact that FLGT’s rapid growth has come as a result of the pandemic. However, despite the arrival of vaccines, Covid-19 testing is going to be in demand globally for the foreseeable future. And its high profile as a result of Covid-19 testing has drawn attention to this California-based company and its other genetic testing capabilities, including hereditary cancer and newborn screening.

Guardion Health Sciences (GHSI)

You’d be hard-pressed to find a high-flying medical stock that’s further from the pandemic effect than Guardion Health Sciences.

The California company develops medical foods and devices for ocular (eye) health, as well as “nutraceutical” food products for consumer health.

GHSI shares collapsed to penny stock status in 2019 after releasing a large secondary share offerings that diluted value from its $4.00 initial public offering earlier that year. A rally through much of 2020 saw GHSI stock hit 55 cents in May, but in November it had dropped as low as 17 cents.

So why is GHSI stock on this list? On Jan. 6, shares in the company began to spike amid heavy trading. After its most recent close of 79 cents, GHSI stock is now up 54% so far in 2021. The Nasdaq issued an extension to Guardion Health Sciences, giving the company until March 15, 2021 to achieve the minimum $1.00 bid price for its shares. The company’s shareholders have already approved a reverse stock split, and it will pull the trigger if the current momentum doesn’t bring it to the $1.00 level by the March deadline.

If you have a tolerance for risk and drama, GHSI stock is one of those medical stocks that could reward your patience.

Natera (NTRA)

Natera is another genetic testing company. Using proprietary cell-free DNA technology, Natera offers a range of tests including versions for colorectal cancer, kidney disease, transplanted organ health, genetic risk assessments prior to pregnancy and prenatal health screening for conditions such as Down Syndrome.  

NTRA stock has been on a strong and consistent growth path since the start of 2019. At this point, shares in the company have gained nearly 840% during that time period, including growth of 24% so far in 2021. 

Investment analysts like what they see in NTRA stock. The company’s services have expanded to be applicable to a growing segment of the population, while revenue has been showing consistent growth. In its third quarter earnings, Natera reported revenue up 26% year-over-year. In 2019, Q3 revenue was up 19% YoY, and in 2018 it was up 17%.  

Those polled by the Wall Street Journal have NTRA rated as a consensus “Buy” with a $124 average price target. Natera is one of those medical stocks with core offerings that are increasingly in demand, putting it in a position for long-term growth. 

Owens & Minor (OMI)

Let’s take a step away from the labs and clinical trials and have a look at some medical stocks that are more on the logistics side of things.

Owens & Minor is a Fortune 500 healthcare company that works with healthcare providers and manufacturers. Owens & Minor’s focus is on supporting services including transportation, distribution and inventory management. It sells MediChoice brand medical products ranging from gloves and bandages, to medical waste containers. The company also offers custom procedural kits and trays and provides data analysis services.

OMI stock crashed hard in 2017 through 2019. During that time, shares dropped in value by 92%. There were numerous issues at play, including revenue misses, pricing pressure, high inventory expenses and the challenges of integrating several acquisitions. However, the company appears to now have all its ducks in a row. After bottoming out below the $3 level in mid-2019, OMI stock began a recovery that accelerated last fall. 

Now closing on the $30 level, OMI stock is up over 1,000% from its 2019 lows and moving in the right direction for shareholders.

Teladoc (TDOC)

The final company on this list is Teladoc. Few medical stocks — that had absolutely nothing to do with the vaccine race — put on a show in 2020 like TDOC stock did. Between the start of the year and last September, TDOC shares surged 197%.

The appeal of Teladoc was easy to understand. With cities in lockdown and both doctors and patients looking to minimize risk of exposure, remote appointments offered an alternative. TDOC stock took a bit of a hit when coronavirus vaccines were announced, but I think this company’s services are here to stay in a post-pandemic world. 

Remote visits for non-urgent medical appointments are more economical and more convenient. They are also proving invaluable for rural populations where doctors may be located hours away from their patients.

In December, I wrote that Teladoc looked good for long-term growth because the pandemic had kickstarted telemedicine. Now trading at around $285, TDOC stock is up 87% since then, and I have no doubt it still has plenty of upside.

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