The stock market can be a fantastic way to build and sustain strong financial returns, but only if you stay in the market for many years. As tempting as it may be to hop in and out of individual holdings, trying to time the best or worst moments to put your capital to work will likely result in missing out on both.
A good rule of thumb is to train your focus on wonderful companies that you can commit to buying and holding for years at a time. That way you benefit from the ability to buy on the dip and enjoy the best days of the market too. The trick, of course, is finding those wonderful companies to invest in.
If you're searching for some great stocks to consider in February, here are two fantastic companies with real buy-and-hold potential.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX -0.06%) is the market share leader in the cystic fibrosis treatment industry, a space on track to be worth $32 billion by the year 2027. The company boasts a highly profitable and steadily growing business around this lucrative space with a portfolio of four drugs, bringing in combined revenues of about $9 billion in the full year 2022 alone, not to mention profits to the tune of more than $3 billion.
Vertex Pharmaceuticals' current slate of drugs targets a broad and growing addressable market, but the company is also setting its sights on growth in other underserved segments of the rare disease drug market. The company's current pipeline includes a candidate that could be a one-time functional care for the rare blood disorders sickle cell disease and transfusion-dependent beta thalassemia. It also includes a non-narcotic candidate to treat acute pain, as well as potential therapies for Duchenne muscular dystrophy and APOL1-mediated kidney disease.
Vertex Pharmaceuticals has many promising prospective sources of business growth to tap into in the years ahead, regardless of whether or not another bear market appears on the horizon. Given this potential and the strength of its existing portfolio of market-leading cystic fibrosis medicines that have built a profitable, cash-rich business (the company had cash and investments of $11 billion on its balance sheet at the end of 2022), Vertex Pharmaceuticals can easily continue delivering wins for investors well into the next decade and beyond.
2. Intuitive Surgical
Intuitive Surgical (ISRG 0.59%) is the driving force in the surgical robotics market, an industry set to reach a valuation of about $20 billion by the year 2030. While there are plenty of healthcare companies that sell surgical robotics systems, none have come close to snagging the market share of Intuitive Surgical. As of 2020, the company controlled roughly 80% of this multi-billion-dollar market, thanks in large part to its first-mover advantage with its top-selling da Vinci surgical suite.
The da Vinci surgical suite has been used in millions of procedures around the world in the last few decades since it first garnered regulatory approval. Today, these tools are used in a wide range of procedures from spinal surgery to general surgery to gastrointestinal surgeries. Intuitive Surgical has multiple streams of revenue to rely on, which include the initial sales of its systems as well as ongoing revenue from instruments, accessories, replacement parts, and software solutions it sells to accompany them.
A resurgence in COVID-19 cases over the last year resulted in changes in procedure volume that have been evident in recent financial reports, but these are relatively short-term factors that don't have anything to do with issues pertaining to Intuitive Surgical's business. Plus, the company is still steadily growing revenue and is profitable.
In the final quarter of 2022, revenue jumped 7% year over year to $1.6 billion, while the company's installed base of da Vinci systems rose 12% from the year-ago window. The company generated earnings of $325 million in the three-month period alone. As procedure volumes recover, shares could see a robust recovery. Right now could be a good time to invest in this promising healthcare stock before that happens.
