The healthcare sector is a safe bet in the low-growth market environment, especially names like Cerner , Express Scripts and Intuitive Surgical , said Greg Woodard, senior analyst at Manning & Napier. “Healthcare is a secular growth industry that is less tightly tied to economic growth,” said Woodard. “And it’s the beneficiary of persistent themes like cost containment and quality improvement that will be at play irrespective of political changes.” One of Woodard’s favorite stocks in the space is Cerner, up 4% year-to-date, saying the healthcare information technology specialist is not too expensive at 23 times 2017 projected earnings considering its growth prospects. “Cerner is a play on the digitization of healthcare records,” said Woodard. “The sharing of best practices continues to be a major theme, as well as better analysis.” Express Scripts is another one of Woodard’s top picks. The pharmacy benefit manager has seen its shares drop 19% thus far in 2016 as the drug pricing debate rages on. However, Woodard said this is overblown and the company is very much “aligned with cost containment initiatives” in the industry. Finally, Woodard is a fan of Intuitive Surgical, which has seen its shares rise over 23% so far this year. In July, Intuitive Surgical blew second-quarter estimates out of the water with revenue rising 14.3% to $670.1 million compared with the $642 million estimate. The number of procedures worldwide increased 16%, driven primarily by general surgery and urologic procedures. Surgeons performed 187,459 procedures during the second quarter using the da Vinci system. Per procedure, the company earned $1,810 in consumable revenue. “Intuitive Surgical is a disruptor in the surgery market. It’s one of the most exciting companies out there,” said Woodard.
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