“XLV” – the Health Care Select Sector SPDR Fund has been a disappointment for investors since the start of the year but a portfolio manager says it’ll likely be a different story moving forward.
Funtleyder is particularly bullish on med tech
Les Funtleyder of E Squared Capital Management is not really concerned about the recent weakness since first quarter is typically the weakest for “healthcare”.
Nonetheless, he’s not too excited about biotech and pharmaceuticals within this space. What Funtleyder does recommend, though, is investing in medical technology. Explaining his view this afternoon on CNBC’s “The Exchange”, he said:
Med tech didn’t have a great year last year. Now they’re starting to come back on weaker dollar, procedure volumes are improving somewhat and new products coming.
DXY is currently down more than 3.0% versus its year-to-date high.
Med tech stocks Funtleyder likes in particular
A name that particularly pops out to him within medical technology is Boston Scientific Corporation (NYSE: BSX) even though, last month, it reported weaker-than-expected earnings for its fiscal Q4.
Versus its year-to-date low, BSX is up 10% at writing. Revealing what else he likes in med tech and the healthcare space at large, Funtleyder said:
Stryker which is procedure based should do better. Others, including Penumbra and DexCom again will do very well because they have a mixture of growth but also fairly safe in terms valuation.
Lastly, the E Squared’s portfolio manager is positive on life science tools within healthcare stocks as well.
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