The market hasn't yet entered bull territory, but it's getting close. The S&P 500 already rose more than 20% from its bear market low -- now, it just has to reach a new high, and the next bull market will begin. Meanwhile, what can you do to prepare? You can pick up a few stocks that have what it takes to excel in a market that favors growth.
You may not immediately think of healthcare, known for offering investors some safety. After all, patients need their medicines and procedures no matter what the economy is doing. But you actually can find some interesting growth players in the area of healthcare. Here, Motley Food contributors Adria Cimino and Keith Speights discuss two favorites -- CRISPR Therapeutics (CRSP 0.34%) and Medtronic (MDT 0.62%) -- that could be entering a new era of growth. Which makes the best bull market buy? Let's find out.
The case for Medtronic
Adria Cimino (Medtronic): Medtronic has been going through a period of transformation, and the efforts are starting to bear fruit. In the most recent quarter, revenue increased 6% on an organic basis, and the company lifted its revenue and earnings per share guidance for the year. Medtronic also reported revenue growth in 11 of 12 geographies during the quarter.
The medical device giant has made operational and supply chain improvements and divested slow-growth businesses. Medtronic has increased investment in areas representing growth opportunities, such as the structural heart business and game-changing technology like artificial intelligence (AI).
Speaking of AI, the company expects the technology to drive industry growth in the years to come -- and Medtronic clearly could benefit thanks to its early focus here. Medtronic is using AI throughout its devices and systems, from continuous glucose monitoring for diabetes to planning for spinal surgeries. The company's AI tailors these systems to suit each patient, so we're getting a taste of personalized medicine.
Medtronic also should benefit from the continual flow of product approvals, adding to revenue growth potential. Over the past 12 months, it's won about 125 approvals in the key geographies of the U.S., Europe, and Japan.
Meanwhile, Medtronic shares haven't reflected this progress. The stock has gained less than 5% this year, and it's trading for about 15 times forward earnings estimates, down from more than 20 a year ago. This looks like a very reasonable entry point for a market giant that's set out a new path to favor growth.
Medtronic should continue to see the results of its transformation efforts show up in its earnings, and that could lift the shares, especially in a market environment that rewards growth. That's why, heading toward a bull market, Medtronic could be a great choice.
The case for CRISPR Therapeutics
Keith Speights (CRISPR Therapeutics): There's a really simple reason why CRISPR Therapeutics should be a great bull market buy. The company is likely to soon have its first product on the market.
CRISPR Therapeutics and its partner, Vertex Pharmaceuticals, await U.S. regulatory approvals for exa-cel in treating sickle cell disease and transfusion-dependent beta-thalassemia. The former approval decision has a PDUFA date of December 8, 2023, while the latter decision should be announced by March 30, 2024.
It's hard to understate just how big of a deal this could be for CRISPR Therapeutics. Exa-cel isn't just a treatment for the two rare blood disorders; it's a functional cure for them. It appears likely to become the first CRISPR gene-editing therapy on the market, a major milestone. CRISPR Therapeutics and Vertex think that exa-cel should have a multibillion-dollar market opportunity.
Regulatory approvals, for exa-cel, could also boost investors' enthusiasm about the rest of CRISPR Therapeutics' pipeline. Of particular interest, the company is evaluating off-the-shelf cancer cell therapy CTX110 in a phase 2 clinical study targeting CD19+ B-cell malignancies. While most therapies must advance to phase 3 testing before seeking approval, CRISPR Therapeutics believes that it could be able to move forward with regulatory submissions based on its phase 2 results.
Sure, much of CRISPR Therapeutics' anticipated growth is already priced into the stock, with the company's market cap hovering near $4 billion. However, a strong bull market encourages investors to look forward to the future. And CRISPR Therapeutics' future appears to be quite bright.
Medtronic or CRISPR?
These companies are quite different, Medtronic being a market giant and CRISPR just approaching the commercialization stage. Medtronic offers investors the security of a full portfolio, while CRISPR offers the excitement of a new technology and potentially game-changing first product. Both of these stocks make great buys today, but the one that stands out as a growth stock could benefit the most from a bull market. And that looks like gene-editing specialist CRISPR, making it the better bull market buy right now.
