I don't have to tell you it's been tough for most investors to make headway in the markets this month. We're navigating a landscape that's never before been traveled. With government stimulus triple the Great Recession and sharp economic growth with pandemic distortions that's bringing on fears of high inflation, it's no wonder we're in a bumpy period.
Today, I'm going to share with you stocks from an area that can offer stability in an otherwise tricky market. A way to buffer the swings seen elsewhere in the markets where every economic data point or Fed comment is being responded to.
I'm talking about Healthcare stocks, which are gliding higher amid news surrounding positive developments. In addition, these stocks offer yields.
A study from Evercore Research shows that, historically, high-dividend stocks outperform during periods when inflation is rising. This is because many companies paying high dividends stand to gain the most from a growing economy.
DAILY CHART OF BRISTOL MYERS (BMY)
First up is Bristol Myers (BMY), which just announced FDA approval last week for another expansion of their blockbuster immuno-oncology drug Opdivo. In addition, the drug is also approved in several countries for various therapies.
The news helped push Bristol Myers out of a 4-month base on volume, with the stock now poised to trade higher. The 2.9%-yielder is now extended following last week's rally and can be bought on a pullback to the $66 area.
DAILY CHART OF ABBVIE (ABBV)
Next up is Abbott Lab's spinoff AbbVie (ABBV), which provides the best-selling drug Humira, used for rheumatoid arthritis. The company has additional products, which have helped ABBV grow their sales by over 50% in each of their last 3 quarters. In addition, ABBV offers a healthy 4.5% yield as analysts raise earnings estimates for both this year and next. The stock broke out of a 4-month base earlier this month and is now in an uptrend.
DAILY CHART OF IQVIA (IQV)
Last up is Medical Research provider IQVIA (IQV), a pioneer in using data to assist biotech and pharmaceutical companies in running robust clinical trials. More recently, IQV gained market share for their COVID-19 related work. The result was a record 1st quarter for the company, with strong double-digit growth across all areas. In addition, management raised guidance for the remainder of this year. IQVIA broke out of a 3-week base last week and is poised for another leg up.
Near-term, the markets appear poised for continued volatility, at least until a clearer path is created as more economic and monetary policy news is released. And while Cyclical stocks have been leading the markets year-to-date, my MEM Edge Report is on the lookout for a move back into select areas of Technology. If you'd like to be alerted to our top-performing stock picks among Cyclicals, as well as be alerted to a bullish move into select Tech names, you can trial this bi-weekly report for 4 weeks for a nominal fee.
You'll also receive sector and market insights that'll keep you in front of sector rotation as it's beginning to emerge. Take a look at a sample report using this link here!
In this week's edition of StockCharts TV's The MEM Edge series, I share top candidates that are defensive, as well as recovery plays. I also highlight new areas that are reversing lengthy downtrends and, lastly, headline stocks due to report earnings next week.
Mary Ellen McGonagle, MEM Investment Research