While the upside to small-cap rule-breaker stocks is significant, a lot of investors prefer to wait until a company is clearly a winner. For biotech investors who want to be more cautious, here are three healthcare names that enjoy monopoly-like dominance and still have substantial upside. Healthcare and Cannabis Bureau Chief Corinne Cardina and Fool contributor Taylor Carmichael discuss Intuitive Surgical (NASDAQ:ISRG), Teladoc Health (NYSE:TDOC), and Veeva Systems (NYSE:VEEV). This segment was recorded live on March 5.
Corinne Cardina: Taylor, let’s talk about some companies that we love that could be a good bargains today. We’re going to talk about some bigger companies that aren’t necessarily your binary biotech stocks. Safer companies, I think between the two of us, we probably own most of these. Monopolies of healthcare. I think you called them rule makers. I think that comes from David Gardner’s, his philosophy. The rule-breaking stocks that ultimately becomes so dominant that they’ve won, and they are now, a lot of these healthcare stocks, they’re government-sanctioned monopolies, they have huge networks. Intuitive Surgical, Veeva Systems, and Teladoc Health are the three that we’re going to talk about. Taylor, let’s talk about this week’s market. We’ve had five days of lots of red. Which of these three would you say is the best long-term buy at today’s prices?
Taylor Carmichael: I’m biased toward Intuitive. I love Intuitive, it’s been kind of hampered because of COVID-19. Intuitive Surgical, really quickly, makes robots for surgery. They dominate this market, and robots are far more precise than human surgeons. This is just a long term trend that’s going to be still a lot of growth ahead of them over the next 10 years, 20 years, 30 years. I just think Intuitive is a very powerful company. Because a lot of their surgeries are elective, people have been putting off surgeries during COVID so they have a built-up demand that’s going to be unleashed, later this year. All three of these are excellent companies. Veeva Systems is a software-as-a-service, they dominate. Teladoc Health dominates their virtual hospital. Teladoc is going to face some headwinds as we unlock and people go back to going to the doctor, and Intuitive has got some tailwinds. So in the near term, I would prefer Intuitive, but over the long term, those two are amazing market opportunities going forward. Whereas of the three, Veeva is probably the safest. All three are cheap right now, these are all going to be extremely profitable companies. They have basically monopolies. You’re getting a good price right now.
Corinne Cardina: Absolutely. If you’ve got cash on the sidelines, you’re excited by any of these, take a look before the market closes today, definitely could be some good opportunities for the long term.
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