Top Healthcare Stocks With High Expected Growth Rates

The best performing stocks in the market are usually the highest-growing, or the stocks with the highest expected growth rates. This doesn’t mean that one should be invested in growth stocks and stay away from the value stocks at all times. Historically, value stocks managed to beat the growth stocks hand over fist.

The reason is simple: Value stocks are beaten-down stocks with very low or negative growth expectations. Not surprisingly, it is easier for these stocks to beat the expectations on the average. On the other hand, everybody is extremely bullish about growth stocks and expects them to have higher growth rates in the future. Their stock prices also reflect this fact. Not surprisingly, it is more difficult for these stocks to beat these challenging expectations.

We ranked the commodity producers based on their expected five-year growth rates. The data source for Wall Street Analysts’ projections is Thomson Financial. Contrarian investors should look into the stocks that are at the top of the table.

Company name	Symbol	Market Cap	Exp. Growth Rate	Div Yield (%)	52w Return (%)
Teva Pharmaceutical	TEVA	45.22B	12.5	1.56	-19.72
Allergan, Inc.	AGN	21.40B	12.5	0.28	14.17
Cardinal Health, Inc.	CAH	14.19B	10.8	1.94	15.41
Dentsply International	XRAY	5.01B	10.1	0.54	6.93
McKesson Corporation	MCK	19.78B	9.9	0.93	26.49
CR Bard, Inc.	BCR	8.09B	9.8	0.75	16.59
Quest Diagnostics Inc	DGX	9.13B	9.7	0.71	0.5
Stryker Corporation	SYK	24.07B	9.6	1.15	12.87
Becton, Dickinson & Co.	BDX	16.97B	8.8	2.11	-0.89
Baxter International Inc.	BAX	29.91B	8.7	2.38	-9.83

Prominent hedge funds are bullish about healthcare industry. John Griffin’s Blue Ridge, Lee Ainslie’s Maverick, and Leon Cooperman’s Omega Advisors have Teva in their portfolios. John Burbank's Passport Capital and Roberto Mignone’s Bridger like Allergan. David Einhorn's Greenlight and Mignone’s Bridger have Cardinal Health in their portfolios. Tom Steyer’s Farallon had just started a $16 million position in XRAY during the fourth quarter.

Andreas Halvorsen’s Viking Global, Lee Ainslie and Larry Robbins’ Glenview also prefer McKesson. Warren Buffett and David Einhorn have BDX in their portfolios. Prominent hedge funds really like healthcare stocks. You can also check out the list of 9 healthcare stocks hedge funds are crazy about which includes more value plays.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.