Here’s one sector that offers ‘offense, defense, growth and value’

on Jun 28, 2022
  • Terranova says healthcare is the perfect sector to own right now.
  • Healthcare stocks tend to do fairly good in times of a recession.
  • Names he likes include Bristol-Myers Squibb, Merck and Eli Lilly.

Healthcare is the one sector that has everything an investor needs to navigate the market uncertainty, says Virtus Investment Partners’ Joe Terranova. “XLV” is down nearly 10% year-to-date.

Terranova explains why he likes healthcare stocks

This evening on CNBC’s “Closing Bell: Overtime”, he reiterated the importance of a diversified investment portfolio, particularly in times of volatility and said “healthcare” was a way to diversify.

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Your defense mechanism against persistent and elevated volatility is to ensure you’re diversified; look towards sectors like Healthcare that offer the proper blend between offense, defense, growth and value.

One of the names within healthcare that pops out to Terranova is Bristol-Myers Squibb Co (NYSE: BMY). Interestingly, the stock is already up 25% year-to-date, but he’s convinced it’s not out of juice yet.

Healthcare is a recession-friendly investment

In April, BMY reported better-than-expected results for its fiscal first quarter. Other notable names he likes and currently owns in this space include Eli Lilly, Amgen, and Merck. Terranova added:

In the JOET ETF, it’s our largest overweight; we’ve got 20% exposure to healthcare that seems to be, from the fundamental characteristics of what you want to own in this environment, the perfect sector. And it’s being reflected right now.

Another reason to own healthcare stocks right now is that they tend to benefit from a weak dollar – which is likely if the U.S. economy ends up in a recession.

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