The smartest stocks to buy with $ 100 right now
Over the past 16 months, investors young and old have received a lesson in patience firsthand. Despite the reference S&P 500 losing more than a third of its value in about a month last year, it has rebounded more fiercely than any other new bull market in history. Since the low of March 23, 2020, the widely followed index is 90% higher.
But here’s the kicker: You can still find value, as long as you have a long-term mindset.
Best of all, you don’t need to have Warren Buffett’s portfolio to build wealth on Wall Street. The rise of commission-free trading platforms and the removal of minimum deposit amounts by most brokerage firms means that $ 100 is more than enough to start or continue your path to financial freedom. Below are some of the smartest stocks you can buy right now with $ 100.
As you are about to see, healthcare stocks are a great place to put your money to work. This is because we cannot choose when we get sick or what disease (s) we develop. No matter how good or bad the economy is, demand for health products and services remains robust. This is why the pharmacy chain CVS Health (NYSE: CVS) would be such a smart stock to buy.
Right now, administering coronavirus vaccines attracts consumers to its stores and gives CVS the opportunity to create lifelong customers. But the additional foot traffic to its stores is just a small reason why investors should be excited about the prospects for CVS Health.
For example, the company has set a goal of opening approximately 1,500 HealthHUB health clinics nationwide. These clinics aim to attract people with chronic illnesses and put them in contact with specialists. This local approach will likely boost consumer loyalty to the CVS brand and direct people with chronic illnesses to the high-margin pharmacy segment of the business.
CVS Health has also thought outside the box in terms of growth. Instead of continuing to grow horizontally by acquiring new drugstore chains or building new stores, it acquired healthcare provider Aetna in 2018. In addition to significant cost synergies, Aetna is increasing organic growth rate by CVS.
This is especially true as President Joe Biden seeks to rebuild the Affordable Care Act. And don’t forget that Aetna’s 20 million plus members are encouraged to stay in the CVS Health pharmaceutical ecosystem.
Considering CVS Health’s profitability, a multiple of 10 times Wall Street’s predicted earnings is just too cheap.
Another smart way to build wealth with $ 100 is to use it in fast growing biotech stocks Exelixis (NASDAQ: EXEL).
Most biotech stocks are losing money hand in hand and still looking for a cure that will bring in $ 1 billion or more in sales. This is not the case for Exelixis, thanks to the flagship drug Cabometyx. The flagship drug of Exelixis is approved by the United States Food and Drug Administration (FDA) to treat first- and second-line renal carcinoma (RCC), as well as advanced hepatocellular carcinoma. Without any further research, these indications alone are expected to lift Cabometyx above $ 1 billion in annual sales by 2022 at the latest.
But here it is: Exelixis is not sitting on its laurels. About six dozen clinical trials examining Cabometyx as monotherapy or in combination are underway, one of which has already been successful. The CheckMate-9ER study, which combined Cabometyx with Bristol Myers SquibbOpdivo cancer immunotherapy, has toured the world Pfizer‘s Sutent as the first-line treatment for RCC. If even a small handful of these clinical trials lead to label expansion, Cabometyx could become a multi-billion dollar drug for Exelixis.
In addition, the incredible cash flow created by Cabometyx has enabled Exelixis to relaunch its internal growth engine. It recently filed an Investigational New Drug Application with the FDA for its very first antibody-drug conjugate (XB002) and has initiated preliminary trials for XL102, an internally developed CDK7 inhibitor.
Investors also often forget that Exelixis is swimming in money. He ended March with $ 1.6 billion in cash, cash equivalents and investments, which is more than enough to support his ongoing clinical research. He may even encourage Exelixis to go on the offensive to make acquisitions.
With a sustained double-digit growth rate and a forward price-to-earnings ratio of 24, Exelixis is a steal.
A third exceptionally smart stock that can be bought with $ 100 right now is the pharmaceutical giant AstraZeneca (NASDAQ: AZN). (I said you would learn how profitable the healthcare industry can be.)
For about two decades between 1997 and 2017, AstraZeneca operated in place. He struggled with competition and the finiteness of brand name drug exclusivity. But that’s in the past now. Two catalysts have made AstraZeneca a growth company, and it may well be Big Pharma’s top performer in the years to come.
For starters, oncology and cardiovascular therapies are driving sales growth. AstraZeneca’s trio of successful cancer drugs, Tagrisso, Imfinzi and Lynparza, increased sales by 13% to 33% at constant exchange rates in the first quarter compared to the same period a year earlier. Meanwhile, type 2 diabetes drug Farxiga saw sales soar 50% at constant exchange rates in the first quarter of 2021.
Farxiga’s annual sales rate, in the first quarter of 2021, is around $ 2.5 billion. However, some Wall Street analysts predict that Farxiga will peak at around $ 9 billion in annual sales by the end of this decade.
AstraZeneca is also in the process of acquiring a manufacturer of rare disease drugs Alexion Pharmaceutical (NASDAQ: ALXN). While it is risky to develop treatments for patient pools that can be measured in the hundreds or thousands, success also means little to no pullback from high insurer list prices and virtually no competition.
The best thing about Alexion is that he has developed a successor to his hit drug Soliris. This next-generation treatment, called Ultomiris, is given much less frequently, which means it improves the quality of life for patients. Ultomiris effectively blocks Alexion’s cash flow for another decade or more.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.