3 Top Global Healthcare ADRs

08/16/2016 10:00 am EST


Charles Carlson

Editor, DRIP Investor

It is a smart idea to include international investments in a portfolio. Foreign stocks are trading at attractive valuations versus US equities, states Chuck Carlson, editor of DRIP Investor.

More than 200 foreign stocks allow any US investor to buy their shares directly, the first share and every share, without ever having to call a broker.

In these direct-purchase plans, US investors are buying American Depositary Receipts (ADRs), which represent ownership in shares of foreign companies.

At the top of my list are three health-care stocks — Fresenius Medical (FMS), Novo Nordisk (NVO), and Shire (SHPG).

Germany-based Fresenius Medical provides kidney dialysis and related services in more than 120 countries worldwide. The stock is trading around its 52-week high, but that shouldn’t scare off investors.

It is estimated that there are more than 2.5 million people suffering from chronic kidney failure that require regular dialysis.

Given the global enormity of the disease, the firm seems situated for good growth going forward. I look for the stock to continue its upward trajectory and view it as a solid buy among foreign stocks.

Based in Denmark, Novo Nordisk is a world leader in diabetes treatment. Diabetes is growing at an alarming rate globally.

Indeed, the World Health Organization says that diabetes cases have increased nearly fourfold in the last quarter-century as a result of excessive weight, obesity, aging, and population growth.

Novo Nordisk is positioned to benefit from the increasing need for treatments. I would feel comfortable buying the stock at current prices and would buy aggressively on breaks below $50 per share.

Ireland-based Shire is best known for its products to treat attention deficit hyperactivity disorder, ADHD.

The firm expanded its operations with the acquisition of Baxalta, creating a leading biotechnology company focusing on patients with rare diseases and other highly specialized conditions.

The firm expects the combination to deliver over $20 billion in annual revenue by 2020. Shire’s drug pipeline looks promising, with more than 50 programs in clinical development.

While the stock has picked up strength in the last month or so, these shares still trade at a 28% discount to their 52-week high of $270 and offer plenty of upside.

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By Chuck Carlson, Editor of DRIP Investor

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