By Philip van Doorn, MarketWatch
Are you looking to invest in companies with a good shot at growing even faster than the U.S. technology giants that have been performing so well?
Michael Santoli pointed out in this CNBC article that the S&P 500 Life Sciences Tools and Services subsector has greatly outperformed the broader market this year. Following his lead, we have taken a deeper dive to highlight more of the growth leaders that distribute and sell supplies and devices to biotechnology and other health-care companies.
The S&P 500 Life Sciences Tools and Services subsector is made up of seven large-cap companies, and the S&P Composite 1500 Life Sciences Tools and Services subsector adds small-cap and mid-cap companies for a total of 14 stocks.
Here’s how the S&P Composite 1500 Life Sciences Tools and Services subsector has performed this year against the S&P Composite 1500 health-care sector and the entire S&P 1500:
The longer-term story also is a good one. Here’s a three-year total return comparison:
And five years:
In July, Andy Acker and Ethan Lovell, the portfolio managers of the Janus Henderson Global Life Sciences Fund, said drug approvals have been increasing amid a friendly political climate, buoying biotech research. That helps explain this year’s success for the S&P Composite 1500 Life Sciences Tools and Services subsector, but for long-term investors, the future looks bright because of innovation and the aging population.
This group of companies also faces lower “headline risk” (bad news stories) than biotech research companies, where so much hangs on successful outcomes for drug trials.
To help identify the most interesting stocks in the subsector, here’s the list, ranked by changes in sales per share over the past 12 reported months. We have also included gross profit margins:
|Company||Ticker||Sales per share - past 12 months||Sales per share - year-earlier 12-month period||Change in sales per share||Gross margin - past 12 months||Gross margin - year-earlier 12-month period|
|Charles River Laboratories International Inc.||/zigman2/quotes/203944031/composite CRL||$37.44||$31.37||19%||35.59%||36.93%|
|Luminex Corp.||/zigman2/quotes/207378371/composite LMNX||$6.92||$5.82||19%||61.58%||68.26%|
|Bio-Techne Corp.||/zigman2/quotes/203973516/composite TECH||$15.01||$13.37||12%||65.03%||67.46%|
|Mettler-Toledo International Inc.||/zigman2/quotes/208535486/composite MTD||$97.93||$87.85||11%||56.16%||55.08%|
|Thermo Fisher Scientific Inc.||/zigman2/quotes/201150432/composite TMO||$48.56||$44.02||10%||46.70%||45.15%|
|Cambrex Corp.||/zigman2/quotes/202999802/composite CBM||$15.55||$14.11||10%||42.78%||40.95%|
|Illumina Inc.||/zigman2/quotes/203509482/composite ILMN||$16.86||$15.56||8%||67.58%||70.84%|
|Agilent Corp.||/zigman2/quotes/207081878/composite A||$13.47||$12.49||8%||53.41%||51.96%|
|Waters Corp.||/zigman2/quotes/205633949/composite WAT||$27.32||$25.55||7%||58.76%||58.51%|
|Parexel International Corp.||$46.90||$44.87||5%||26.22%||26.53%|
|INC Research Holdings Inc. Class A||$28.44||$27.42||4%||21.60%||21.48%|
|Bio-Rad Laboratories Inc. Class A||/zigman2/quotes/207953537/composite BIO||$70.02||$68.76||2%||55.61%||56.43%|
|PerkinElmer Inc.||/zigman2/quotes/203769792/composite PKI||$19.73||$20.43||-3%||45.75%||44.79%|
|Quintiles IMS Holdings Inc.||$42.81||$48.81||-12%||26.17%||28.04%|
You can click on the tickers for more information, including news coverage, price ratios, charts and financial reports.