Prescriptions for Portfolio Health: 3 Resilient Healthcare Stocks

Key Points

• The healthcare sector displayed remarkable relative strength during the recent market selloff, with three standout stocks.
• Amgen saw a significant 27% surge in the last three months and UnitedHealth Group rallied over 13%. 
• Centene staged an 11% rally off its 52-week lows and its consensus price target sees over 17% of further upside.

Over the last several months, many sectors, industries, and the overall market have come under pressure and experienced significant outflows and waves of selling. 

During this period, over the last three months, the SPDR S&P 500 ETF Trust NYSE: SPY, which provides exposure to the S&P 500 Index and many blue chip stocks, has sold off over 2%. Even after the recent bounce in the market, the SPY remained in the red over the previous three months. 

During the peak of the recent selloff, one sector in particular, the healthcare sector,  stood out for its impressive relative strength. Specifically, three stocks within the industry could dodge the wave of selling and stage remarkable moves higher. 

So, let’s look closer at the three stocks that have shown resilience to market uncertainty and the broad selloff. 

Amgen NASDAQ: AMGN

Amgen, the multinational biopharmaceutical giant, currently has a market capitalization of about $151 billion and a P/E ratio of 19.12, despite its surge higher in the previous three months. Not only does the stock boast an impressive return to shareholders in previous months, but it also offers a 3% dividend yield. 

Over the previous three months, shares of AMGN have surged almost 27% higher. More recently, the stock has rallied nearly 9% over the last month thanks to a recent breakout above a critical level. After experiencing some resistance in the $270 area, AMGN recently broke above this area with a surge in volume, firmly marking a shift higher in momentum. 

However, analysts don’t entirely agree with the recent price action in AMGN. Based on sixteen analyst ratings, the stock has a Hold rating and a price target below the current price, calling for over 4% of potential downside.

UnitedHealth Group NYSE: UNH

UNH is a multinational insurance and healthcare company based in Minnesota. The company boasts a large market capitalization of $485 billion, making it one of the largest companies in the sector. Despite its recent double-digit share appreciation, UNH still has a relatively modest P/E of 23.45 and offers a dividend yield of 1.44%.

The stock has rallied over 13% in the previous three months, pairing back earlier losses from the year. Year-to-date, the stock remains in the slight negative, down just over 1%, but investors will have increased confidence thanks to its recent surge higher. 

Notably, the stock recently took out an important area of resistance around $510 and has shown the ability to hold firmly above it. Going forward, It will be essential to see whether the stock can continue to build an uptrend above the previous resistance, which could signal further upside. 

Centene NYSE: CNC

Last but not least is Centene, the healthcare and insurance company. CNC has a smaller market cap than the above two, at $38 billion. However, the company boasts double-digit returns over the previous three months and a consensus price target calling for further double-digit gains. 

In the previous three months, the stock has staged an impressive rally off its 52-week lows, surging over 11%. As the stock trades near $70, a critical resistance level, it will be essential to note whether it can successfully base over this vital resistance level. If the stock can base over resistance, a move toward the consensus analyst price target might be possible in the short term.

CNC has a Hold rating based on the fifteen analyst ratings. However, the consensus price target of $83.22 sees over 17% upside for the stock.