3 stocks that can’t be stopped higher than they were before the market correction
Over the past six months, the market has fallen sharply thanks to a toxic mix of concerns about a looming recession, rising inflation, and rising interest rates. Growth stocks and unprofitable companies were hit particularly hard.
However, there are a few companies that have thrived despite the increasingly pessimistic environment. Let’s take a look at three of these unstoppable stocks that (so far) have (so far) withstood market turmoil with ease.
Sanofi (Cuts -0.63%) It is a multinational pharmaceutical giant with a market capitalization of more than $135 billion, and its shares are up more than 17% compared to six months ago. To undermine market return, Sanofi has undertaken the same set of activities it has been doing all along: drug development and marketing. In the first quarter alone, it recorded three regulatory approvals for three different drugs, and submitted regulatory filings for five other projects as well.
Each new drug or indication of a drug that has already been approved means more recurring revenue for years to come, and that remains true no matter what happens in the global economy. For now, the multifunctional immunosuppressive drug, Dupixent, is taking the lead. It had the largest share of new prescriptions for type 2 inflammatory diseases issued by dermatologists, allergists and pulmonologists in the first quarter.
More importantly, Sanofi’s financial performance is also strong, which certainly helps protect it from a downturn in the market. Its 12-month arrears net income has grown about 87% in the past three years, which is a decent pace, especially given that revenue grew just under 12% in the same period. Revenue totaled $46.8 billion over the next 12 months.
Sanofi also increases its spending on research and development (R&D) each year to keep pace with its competitors and ensure that its pipeline remains full of future revenue opportunities.
like sanofi, AstraZeneca (AZN 1.05%) It is a leading biopharmaceutical company, yet even bigger with a market capitalization of over $206 billion. AstraZeneca’s secret to outperforming the market in recent months is sizzling sales. Total first-quarter revenue increased 60%, to $11.4 billion.
Aside from that, the pharmaceutical giant also received four new regulatory approvals and submitted three for review, meaning its sales are likely to be higher for the remainder of the year and into next.
AstraZeneca’s delayed pipeline is one of the strongest in the industry with 16 all-new drug candidates in Phase 3 clinical trials and more than 120 programs in late development. To advance all of these programs, the company has spent more than $10.2 billion on research and development over the past 12 months. Furthermore, subsequent 12-month R&D expenditures have increased by about 78% in the past five years. This should help ensure that new regulatory approvals continue at the current pace for the foreseeable future.
Finally, investors will be happy to know that AstraZeneca’s earnings are in good shape, up 119% in the past five years. While its 2.1% forward yield won’t make anyone rich, it’s (so far) attractive enough to convince shareholders to stay put when the market is in trouble.
With its shares up just under 0.4% in the previous six-month period, STRESS (STE 1.86%) It’s not heading to the moon relative to the market, but it’s still steady. Steris sells sterilization solutions to biopharma companies like Sanofi and AstraZeneca, and it also serves hospitals, biomedical laboratories, and healthcare providers with the equipment they need to keep their facilities free of microbes.
The main reason this company is better off than it was before the patch is because they are taking advantage of the time march in a very direct way. As the healthcare sector grows, the demand for its products and services also grows since most medical procedures and most biopharmaceutical research require extensive use of sterilization. Over the past decade, its 12-month overdue revenue and net income have expanded by 222% and nearly 77%, respectively. And stock prices have absolutely nothing to do with Steris’ customers’ need for their products.
Investors should keep in mind that this is not a high growth stock. Management estimates that total revenue growth will continue to range from medium to high single digits for the foreseeable future. This means that their relatively strong performance during recessions can be offset by their relatively weak (but consistent) performance during bull markets or booms.
In short, when you’re selling surgical wipes and sterilizing cabinets, slow and steady is pretty much the only way to run a race, and that’s fine for investors looking for a haven.