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Why Align Technology, Bausch Health, Momenta Pharmaceuticals, and ShockWave Medical Stocks Soared Today

By Keith Speights – Apr 6, 2020 at 4:21PM

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Optimism that the worst might be over with the COVID-19 outbreak fueled investors' enthusiasm for these healthcare stocks.

What happened

Shares of several healthcare stocks soared today as the broader market jumped after the number of new COVID-19 cases in the U.S. appeared to have slowed somewhat. Align Technology (ALGN 6.62%) stock vaulted 14.6% higher. Shares of Bausch Health Companies (BHC 7.26%) rose 9.8%. Momenta Pharmaceuticals (MNTA) stock climbed 15.6% higher. And shares of ShockWave Medical (SWAV 2.84%) were up 10.6% at the close of trading today.

So what

Johns Hopkins reported that the number of new COVID-19 cases in the U.S. on Sunday totaled 28,222. That was down from 33,264 on Saturday and 32,133 on Friday. This decline caused the five-day moving average of new COVID-19 cases to fall for the first time since the coronavirus pandemic started.

Businessman holding up a red line that was going down but is now trending up.

Image source: Getty Images.

Any signs that the worst might be over for the COVID-19 outbreak that has shut down much of the global economy is good news. For Align Technology, it could mean that the company could soon see a rebound in sales for its clear orthodontic aligners as patients are able to return to visiting dental professionals. For Bausch Health, a return to normal could boost sales of its eye-care and other products. 

Momenta Pharmaceuticals could be able to resume enrolling in some of its planned clinal studies if individuals could soon be able to leave their homes without fear of being infected by the novel coronavirus. ShockWave Medical's intravascular lithotripsy (IVL) device sales could also benefit once hospitals can go back to business as usual.

However, investors shouldn't pin all of their hopes on one day of diminished COVID-19 numbers. The situation could get worse before it gets better. Don't be surprised if today's gains are quickly erased.

Now what

The main thing for investors to look forward to with all four of these healthcare stocks is their long-term prospects.

As a clinical-stage drugmaker, Momenta faces the highest level of risk but also the potential for significant gains if its pipeline candidates are successful. Bausch Health continues to deal with sinking sales for some of its products that have lost exclusivity. On the other hand, the company has solid eye-care and surgical businesses and has new pharmaceutical products on the market.

There's a pretty good argument that Align Technology and ShockWave Medical have the strongest growth prospects. Align's clear orthodontic aligners remain popular, and the company continues to invest in marketing to build patient awareness of its products. ShockWave Medical's IVL devices could have a $6 billion addressable market. Both Align and ShockWave should bounce back nicely when the COVID-19 crisis has passed.

Keith Speights owns shares of Align Technology. The Motley Fool owns shares of and recommends Align Technology, Bausch Health Companies, and ShockWave Medical. The Motley Fool recommends Momenta Pharmaceuticals. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Bausch Health Companies Inc. Stock Quote
Bausch Health Companies Inc.
BHC
$7.54 (7.26%) $0.51
Align Technology, Inc. Stock Quote
Align Technology, Inc.
ALGN
$229.91 (6.62%) $14.27
Momenta Pharmaceuticals, Inc. Stock Quote
Momenta Pharmaceuticals, Inc.
MNTA
ShockWave Medical Stock Quote
ShockWave Medical
SWAV
$286.87 (2.84%) $7.91

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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