One of the best things about stock market investing is that it allows you to take control of your financial future now, instead of waiting for a financial windfall that most of us never experience. If you have just $40 to spare, you could become the proud owner of a small piece of any one of these three healthcare businesses.
|Company (Symbol)||Industry||Market Cap||Recent Closing Price|
|Collegium Pharmaceutical (COLL 1.18%)||Biopharma||$732 million||$21.19|
|InMode (INMD -1.81%)||Medical Devices||$1.2 billion||$36.68|
|Pfizer (PFE -0.58%)||Biopharma||$201 billion||$36.44|
Read on to see how a small investment in these companies now, could lead to market-beating gains for years to come.
1. Collegium Pharmaceutical: Responsible pain management
Physicians still rely heavily on opiates like oxycodone to help them manage patients who aren't relieved by less addictive treatment options. Collegium Pharmaceutical markets Xtampza ER, an extended-release oxycodone capsule with significantly less abuse potential than immediate-release oxycodone and it's an increasingly popular option. Despite a sales team sidelined by stay-at-home orders, second-quarter sales of Xtampza ER rose 29% year over year to $33.6 million.
In addition to Xtampza ER, Collegium markets Nucynta, a powerful pain reliever the company recently acquired full U.S. rights to market. Combined sales of Xtampza ER and Nucynta allowed the company to report a modest $8.5 million profit in the second quarter that will probably rise in line with sales of the company's pain relievers for the foreseeable future.
Despite turning the profitability corner, the sum value of all Collegium's shares works out to just $732 million at recent prices, but you can add one to your portfolio for just $21.19 at recent prices.
2. InMode: Cosmetic devices
This company develops, makes, and markets devices that dermatologists use to complete a rapidly increasing variety of minimally invasive cosmetic procedures such as face contouring and hair removal. Fear of contracting COVID-19 created strong headwinds for InMode, but the company still reported a reasonable profit in the second quarter.
In addition to the equipment aesthetic surgeons can build a successful business around, InMode also sells consumables that are replaced before every new procedure. The company offers extensive post-sales support to help boost the number of procedures performed, and it looks like a little training goes a long way. Since the beginning of 2019, sales and marketing expenses have chewed up less than half of total revenue.
InMode reported second-quarter revenue that was 21% lower than the previous year period due to the COVID-19 pandemic at $30.8 million. Despite the temporary hit to the top line, this company's highly profitable operation squeezed out an impressive $8.6 million net profit during the period.
3. Pfizer: Get paid
Unless you watch the biopharmaceutical industry closely you probably didn't notice that the blockbuster drugs you associate with Pfizer, won't be Pfizer drugs in a few more months. Earlier this year, America's largest pharmaceutical company made a plan to slim down and focus on developing new and innovative drugs. That said, Pfizer's still a giant with huge cash flows the company returns to investors as a quarterly dividend.
At recent prices, shares of Pfizer offer a juicy 4.2% yield, but this payment will change once Pfizer completes a planned merger of its non-patent protected assets with Mylan (MYL) to create a company called Viatris. Once the deal completes, Pfizer shareholders will also own shares of Viatris and receive dividend payouts from both companies that will most likely add up to a bit more than they're receiving right now.
Pfizer has plenty of blockbuster drugs with rapidly growing sales now, and a pipeline full of potential new drugs to help its dividend payout grow. The most closely watched at the moment is BNT162, an experimental coronavirus vaccine the company is developing in collaboration with BioNTech (BNTX -0.18%). If authorized or approved by the FDA the U.S. will pay $1.95 for the first 100 million doses with an option to acquire up to 500 million more.
It's hard to believe it, but for less than $40 you can get these companies to work for you, all day, every day, into eternity. From time to time, you'll need to check on their performance, but that's probably a lot easier than whatever you did to earn your money in the first place.
Investors can reasonably expect these businesses to produce gains for their portfolios but it's important to remember that stock prices never move in a straight line. If the going gets rough and you're tempted to cut and run, just remember this: Hold shares of a profitable company long enough and you'll come out ahead every time.