Looking for a sector to invest in to help you reach your 2024 goals? If history is any indication, healthcare may be the answer. The Healthcare Select Sector SPDR Fund (XLV) has recorded increases in November for eight of the past 10 years. As of December, the fund had raised money in four of the past five years. Additionally, the sector is attractively valued relative to the broader market. The healthcare industry’s forward price/earnings ratio (P/E) is 22.2 times, compared to the S&P 500 index’s multiple of 24 times. “We believe the healthcare industry is at an attractive entry point ahead of what is historically its strongest month of the year.” Although there is still some broad-based risk in the overall market into late October, They will take advantage of the weakness in healthcare as we look forward to new highs towards the end of the year,” said Jonathan Krinsky, chief market technician at BTIG. XLV .SPX YTD Mountain XLV vs. SPX Year-to-date He also noted that XLV has fallen for three consecutive weeks, something that hasn’t happened since May 2023. It’s an attractive entry point,” Krinsky said. He added that the iShares Biotechnology ETF (IBB) has averaged a 3.3% gain in November going back to 2001. The optimism for healthcare comes as the sector lags the broader market. Since the beginning of the year, XLV has risen 11.3%, while the S&P 500 index has risen 20.6% to a record level. Healthcare companies that could do well include Masimo and Viking Therapeutics, Krinsky said. Masimo’s stock rose 19% in 2024, while Viking soared 258% on hopes for an experimental obesity treatment. Masimo’s CEO was recently fired after a proxy battle with activist investor Politan Capital. Elsewhere on Wall Street this morning, Citi opened UPS with a buy rating and a price target suggesting a 23% upside. “Despite loss of market share to Amazon Logistics and Walmart Fulfillment Services, and headwinds from China-direct e-tailer giant Tem and Shein, UPS is poised to emerge from the end of the freight downturn and the start of the next upcycle. “We are in a position to benefit from this and drive profitability improvements due to our volume,” Citi said.
Why health care could be a winner heading into year-end
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