As we exit August, a few of our top Motley Fool contributors think buying shares of Teva Pharmaceutical (NYSE:TEVA), Health Insurance Innovations (NASDAQ:HIIQ), and Gilead Sciences (NASDAQ:GILD) could pay off. Are these stocks right for your portfolio? Read on to learn more about the upcoming catalysts that could cause these stocks to rally.  

The generic drug titan that's rediscovering its roots

Chuck Saletta (Teva Pharmaceutical Industries): About a year ago, Teva Pharmaceuticals Industries was in freefall. Ironically for the world's leading provider of generic drugs, Teva was facing intensifying competitive pressure from the entry of generic offerings of its blockbuster patent-protected medication, Copaxone. Despite historically frequently being on the other side of that patent cliff, Teva came across as being largely unprepared for what would happen to it when its blockbuster lost patent protection.

A buy button on a keyboard.

IMAGE SOURCE: GETTY IMAGES.

After slashing its dividend and its workforce, Teva embarked on a major restructuring program designed around reflecting the reality that it needed to return to its roots. That restructuring attracted no less astute an investor than Warren Buffett, who has been buying up millions of Teva shares throughout 2018. Buffett is well known for sniffing out fundamentally strong businesses going through temporary rough patches, and his investment in Teva likely reflects that perspective on the company.

While the recent past has been rough on Teva, one key reason to consider buying it now is that it is reaching the anniversary of the worst news associated with its troubles. The stock market is well known for having a very short memory, and now that we're close to the anniversary of that event, year-over-year comparisons should start getting better soon.

Another key reason is that Teva just recently got approval for a generic EpiPen -- the ubiquitous emergency injection that people with severe allergies take if they have a nasty allergic reaction. So, not only is the worst of its Copaxone-fueled collapse behind it, it just scored a major win in its traditional wheelhouse of generics.

While nothing is guaranteed in the market, Teva is showing many signs of a fundamentally solid business recovering from a short-term stumble. And that makes it worthy of considering as an investment right now.

Short term is good for this stock's long term

Keith Speights (Health Insurance Innovations): You might not be familiar with Health Insurance Innovations, but the stock has more than doubled so far in 2018. The stock received a big boost earlier in August with the Trump administration's announcement of new rules that should change the dynamics of the health insurance market.

Health Insurance Innovations operates a cloud-based technology platform for customers to choose individual and family health insurance plans offered by third-party insurers. A big change is on the way that holds the potential to make the company's platform more attractive than ever. 

Effective Oct. 1, 2018, U.S. insurers will be able to offer short-term health insurance plans with durations of less than 12 months. Currently, short-term plans are limited to durations of less than three months. Insurers will also be allowed to renew short-term plans for up to 36 months. These plans don't have to offer all of the minimum benefits required by the Affordable Care Act, popularly known as Obamacare. As a result, they are likely to be significantly less expensive than short-term plans are now.

I think Health Insurance Innovations will be able to grow sales tremendously thanks to the new short-term health insurance regulations. Many individuals whose income is too high to qualify for federal subsidies under Obamacare have seen their health insurance rates skyrocket. My hunch is that many of them will be attracted to the new short-term plans -- and that should mean brighter long-term prospects for Health Insurance Innovations.

Big news on tap

Todd Campbell (Gilead Sciences): There's no guarantee that data from Gilead Sciences' phase 3 study of filgotinib in rheumatoid arthritis will be good, but mid-stage data was strong and if phase 3 results are similar, the company's shares could rally.

The rheumatoid arthritis market is worth billions of dollars in sales per year, and current anti-TNF therapies don't work well for many people, suggesting an unmet need that filgotinib can address.

For instance, adding filgotinib to methotrexate, a standard of care, resulted in far more people achieving 20%, 50%, and 70% improvement in their disease. Specifically, 39% of people receiving twice-daily dosing of 100 mg of filgotinib achieved a 70% improvement, versus 9% of patients given a placebo.

If phase 3 results confirm this previous data, then filgotinib could edge its way in as a second-line therapy that's used ahead of anti-TNF's, including $18 billion per year Humira. 

Admittedly, the trial could flop, and if it does, Gilead Sciences' shares would likely fall. That wouldn't be pleasant, but filgotinib isn't Gilead Sciences' only drug. It markets a slate of commonly used HIV drugs and hepatitis C drugs, and it has a game-changing gene therapy for blood cancer on the market, too. I think adding some Gilead Sciences share to your portfolio before this data is reported could pay off, but only time will tell if I'm right.

Chuck Saletta owns shares of Teva Pharmaceutical Industries. Keith Speights owns shares of Gilead Sciences. Todd Campbell owns shares of Gilead Sciences. His clients may have positions in the companies mentioned. The Motley Fool owns shares of and recommends Gilead Sciences. The Motley Fool has a disclosure policy.