The market is settling down at some of the lowest rates in months. As the healthcare market continues to have breakthrough achievements, our analysts will walk us through the pros and cons of investing now, and give us some recommendations on the best companies to buy during this slump.

A full transcript follows the video.

Kristine Harjes: Market Madness: where to put your money now. This is Industry Focus.

Hey, everyone. Welcome to Industry Focus, healthcare edition. I'm Kristine Harjes, I'm your host, and I'm here with contributor Todd Campbell as always. Todd, how are you doing today?

Todd Campbell: I'm doing really well. This is going to be a very interesting conversation for Fools to be listening to.

Harjes: Yeah. It will definitely be fun. If any of you have been listening to the other podcasts, or articles, or any content that The Fool has put out there amid all this chaos in the market, you'll know that we're all excited. We see these market drops as opportunities. As long term investors we're looking at it as a Black Friday sale going on right now.

If you look back at the healthcare total sector, since July 31st it's down almost 11%. If you go specifically to biotech, you're down 15.5% since the 31st of July. Broader markets are down, too. We've all seen the news about this. The NASDAQ is down 12%, the Dow Jones Industrial Average is almost 12% as well.

We're sitting here, and maybe everyone else in the investing world is freaking out, but we're sitting here at HQ like "I hope I have some cash to put in some stocks right now. This is a sale." What we want to talk about today is: what should long term investors be looking for when the market goes down like this? I'll tee it off with you, Todd. What's been jumping out to you?

Campbell: One of the ways investors should really be considering what's happening right now -- first of all, it's summer. If you're new to investing and you haven't really got a number of summers under your belt, this is typically when market weakness cracks in the armor, if you will. This is not uncommon. It's not something that should be freaking out investors.

There are some opportunities out there that investors might want to consider. When these things happen, the temptation might be to go after whatever's fallen the most. I would caution investors against trying to do that because a lot of times high quality stocks don't really pull back that often, and when they come back down in periods like this, those are the names you should go after. Don't try to catch a falling knife by buying some hot company with a Phase I trial that you thought you liked three months ago, that's now down 50%.

Instead, focus on a name like Celgene (NASDAQ:CELG). For people who've tuned in previously to our conversations, Celgene is a name that's come up before and I happen to own stock myself. This is a name that I like, not just for next week or next month; I like it for 10 years, or 15 years. This is a Goliath company in biotech.

They've got a chance to do $9 billion in sales this year, and according to their guidance they have a chance to do $21 billion in sales by 2020.

Harjes: The fact that they even released 2020 guidance is an indication that these guys know what they're doing.

Campbell: So few companies are willing to put themselves out there for investors and say "This is where we think we could be five years from now." That amount of clarity is fantastic. No one knows if they'll be able to deliver on that forecast. You have to take that with a grain of salt, but it does show the level of confidence that this company has, that it can continue to expand demand for its multiple myeloma drugs, Revlimid and Pomalyst. It continued to grow sales for its cancer drug Abraxane, and continue to build momentum for its newly launched psoriasis drug Otezla.

All of these things should allow this company to generate significant earnings growth over the coming years. With stock down about 14% this month alone, this is an opportunity to buy a company as less than 20x next year earnings that's issuing guidance that they're likely to more than double their earnings over the next five years. To me, when you get a chance to buy quality on sale, you have to.

Harjes: I couldn't agree more. When I think about the phrase you just said -- "quality on sale" -- I think of Johnson & Johnson (NYSE:JNJ). This is a staple dividend stock, a staple holding in a lot of healthcare portfolios. They're huge. They're composed of three different business segments. They've got their consumer products, which everyone knows them for. You've got your Band-Aid, Listerine, and Tylenol.

Then they've got the medical device unit, which might be a bit slower growing, but is still poised for growth. Then you've got pharmaceuticals. Maybe it's just because my heart is in biotech, but that's the one that really intrigues me. Their pharmaceuticals division is just killing it lately. It looks like they'll continue to expand for years.

When you look at that dividend, right now they're yielding 3% which is $3 per share. They're a dividend aristocrat. More than that, your dividend aristocrats have been increasing their dividends for at least 25 years. They've gone even longer than that. There are only six other publicly traded companies out there with a longer lasting streak of dividend increases. If you look at buying this stock on sale, you're really looking at the future. If you expect them to grow, they'll have a dividend yield that's out of this world.

I don't see their dividend payout going anywhere. Their payout ratio stands at 50%, so they've got the money to keep on going. It looks like the business is only getting bigger. They're down 9% since July 31st, so that's a quality stock on sale.

Campbell: It's hard to disagree with you. You've got a company that has been raising its dividend for decades and they're a company whose products are not only available on every store shelf at every retail store in America, but they're also reimagining the way we care for patients with new therapies.

They've got great drugs like Xarelto, the factor XA inhibitor, which is reinventing how we keep blood flowing through the body. They've got Invokana, which is a great new diabetes drug that's likely to hit billion dollar, blockbuster status this year. This is a company that's not going to knock the lights out in terms of topline growth, but it's a steady, strong, dividend paying stock that you can put away and add to over the next 10 to 20 years and feel OK about it.

Harjes: This is the kind of company where, when you see it dip a little bit you don't have to freak out because it's not that their one and only Phase I drug is failing in trials. Aside from general market down, it looks like people are punishing the stock for currency fluctuations, of all things. That's not material to the business for long term investors.

Campbell: You're always going to have currency risk with global companies. That's the whole idea of going global. You offset the risk to the dollar with risk elsewhere. You really shouldn't be thinking "In the next six months, because the dollar is stronger than this, or the euro is stronger than that; I'm going to step away from this stock." This is a long term name to own in portfolios.

Like you said, getting it on sale -- 9% off, 10% off -- that makes a lot of sense.

Harjes: Absolutely. Let's broaden the scope a bit. I know you and I could talk about biotech forever. What else are you looking at in healthcare, but outside of biotech alone?

Campbell: The message we're trying to drive home for everyone is: don't go out and try to grab the crashing CAR-T immunotherapy play that has the Phase I drug.

Harjes: There's some obliteration.

Campbell: Yeah. Stay focused on the broader healthcare spectrum. You don't have to be focused on drug makers, or biotechs. There are plenty of great med-tech, medical device companies, and equipment instrument companies out there that you can focus on, too. One that jumps to mind is Medtronic (NYSE:MDT).

Medtronic is a Goliath in med-tech. they have their hands in almost anything that has to do with medical devices. It doesn't matter if it's cardiology, like stints, it's in diabetes with glucose monitoring; they have their hands in it. This is a company with tens of billions of dollars in revenue, they pay a dividend that's increased for 27 years, and with their newly purchased Covidien they merged with they believe they're going to save $850 million a year in synergies by 2018.

Although this is a single digit grower, a lot like J&J, you're talking about a Goliath leader in their markets and they should be able to continue reward investors and return money to investors over time.

Harjes: For a med device company they're actually fairly well-diversified. They're in cardiovascular, they're in diabetes, they're in spine, they're both in the U.S. as well as outside the U.S.; this is a really solid company. They're down 10%. Again, we're talking about a very well-diversified company that's proven itself over many years, and it's trading for a fairly inexpensive price right now. I believe they're at less than 15x next year's estimated revenue.

Campbell: It's a reasonable price to pay for a steady-eddy stock like this that you can put in your portfolio and sleep well at night. In addition to Medtronic, the only other name that I'd highlight today -- and I'm still digging through and finding other names as we go that we can probably talk about next week -- is CVS Health (NYSE:CVS).

That's another name that you and I have talked about frequently in the past. CVS Health has their hand in everything tied to managing patient care in the form of drug. They've got one of the largest pharmacy networks in the country. They've got one of the largest pharmacy benefit managers in the country. They've got the largest healthcare clinic operation in the country, with 1000 locations.

They're currently trading down about 11% this month. You're able to buy a stock that is a very high quality company at a discount.

Harjes: This is a really good way to plan the general trends in the healthcare space right now. You've got the grain of America. You have people spending more money on drugs, you've got more people looking to go to retail pharmacies, and you've also got specialty drug spending skyrocketing. That's when you have CVS' pharmacy benefit management segment come in and that segment is not to be underestimated. That's the real growth driver here, in my opinion.

Campbell: It's a huge business, and it's a low margin business, but it's an incredibly important business. What they're doing is helping payers -- like health insurers, or employers -- reduce the cost of medication and at the same time, they're improving patient health by making sure that people are taking their drugs as they're supposed to be taking them.

It's a very important business to CVS, and it's growing. I think you're going to see CVS continue to invest in future growth, you're going to see its earnings continue to climb regardless of the week to week machinations of the market. The reality is, there are going to be far more seniors in America 10 years from now than there are today. Those seniors are going to demand more care, more medicine, and CVS is going to help provide that.

Harjes: I think you hit the nail on the head there. When you look at the healthcare industry you're looking at an industry is poised demographics-wise to continue to climb. We've seen a huge rise in healthcare stocks already, particularly in biotech, and now with the market cooling off a bit, I think this represents a really good opportunity to buy into the trends that a long term investor can really make some money on.

We don't believe in timing the market or anything, but I think you would agree with me on that, Todd.

Campbell: Absolutely. If you go back and dissect the ideas that we just threw out there, they all have common themes. They're all leaders in their space. They're all benefiting from global trends in healthcare. Larger populations, increasingly longer living people, and increasingly insured populations that can pay for healthcare.

I think you're absolutely right. These are long term buy and hold names that are trading lower than they were 30 days ago. The same way you walk into Tiffany's and see something for a steep discount and say "This is a high quality item I can buy at a lower price", that's the way you should be viewing these stocks, too.

Harjes: Exactly. We've been throwing a lot of names out here that Todd and I are both big fans of. I'm just going to take a moment to remind everyone: as always, people on this program may have interests in the stocks that they talk about, and the Motley Fool may have formal recommendations for or against those stocks. So, don't buy or sell anything based solely on what you hear on this program. Thank you so much, Todd and listeners. Thanks, as always, for being here with us. We'll be back next week.