And the Winner is...Healthcare!
Kyle is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
There's an urban legend that when reporters asked bank robber Willie Sutton (a.k.a. "Willie the Actor" and "Slick Willie”) why he robbed banks, he replied: “Because that's where the money is.”
This year, the money was in the Healthcare Industry. While Utilities fell 4.93% against the S&P500 and Materials fell 6.20%, the Heathcare sector topped the charts, beating the S&P by 25.66% on the year.
Let's take a look at 3 Healthcare stocks with very different stories to tell.
The global Healthcare sector dominated 2012
The Cooper Companies: A Turnaround Story
Verdict: Up 42.19% YoY/29.84% vs. S&P500
The Cooper Companies (NYSE: COO) engages in the provision of medical devices for healthcare professionals worldwide. Under Robert Weiss' leadership, Cooper has smashed the silo between the company's R&D department and its manufacturing division, an administrative breakthrough which resulted in the development of Cooper's silicon hydrogel contact lens in just 6 months.
Cooper easily beat the Street's consensus estimates in Q3. Total revenue rose 8% year over year on strength in its CooperVision and CooperSurgical divisions, while net earnings were boosted by margin gains across virtually every unit. The company has revised its guidance upwards, with earnings per share now estimated at $4.90-$5.15 on revenue of $1.44 billion - $1.55 billion.
A Fall from Grace: Warner Chilcott Plc
Verdict: Down 35.67% YoY/47.18% vs. S&P500
Originally a Dividend lover's favorite, Warner Chilcott (NASDAQ: WCRX) has had the worst year of its life. Just to ask the obvious question, where is everyone going? Just after the bell on Sept. 5, Warner Chilcott announced that the primary shareholders as well as management were going to dump almost half of their holdings (42.9 million shares) on the market. Bain, Thomas H. Lee Partners and JPMorgan were taking a pass. Warner Chilcott has lost 4/5ths of its book value since its IPO in 2006.
Why is the company taking such a beating? It hasn't found a way to grow in markets outside of women's health and gastroenterology.
Novo Nordisk: A Star Performer
Verdict: Up 48.25% YoY/31.10% vs. S&P500
Diabetes is running at record levels worldwide, the market for diabetes drugs is exploding along with it. The diagnosis of type 2 – once known as ‘adult onset’ diabetes – has risen 21 percent among American youth from 2001-2009, while type 1 diabetes rose 23 percent. Four out of five diabetics now live in low and middle-income countries. Half of all diabetics are currently diagnosed.
You do the math.
With roughly 50% market share by value of the global insulin market, Denmark-based Novo Nordisk (NYSE: NVO) is the leading provider of diabetes care products and benefits from decades of accumulated research and marketing experience, as well as a broad customer base, and a strong patent portfolio. NVO's diabetes products include modern insulins, such as Levemir, NovoRapid, and NovoMix;new-generation insulins such as Degludes; and insulin-delivery devices, such as the FlexTouch insulin pen.
With the passage of the Affordable Healthcare Act and looming retirement of the Baby Boomers, the Healthcare industry is projected to grow by 3% annually, rain, sleet, or shine. No matter how you slice it, Healthcare is on its way to becoming the Go-to industry sector for growth investors looking to outperform the market.
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