The healthcare space is trading at an about 20% discount to the benchmark that Virtus Investment Partners’ Joe Terranova sees as a strong enough reason to pick it as his favourite sector for 2022.
Terranova’s top pick within the healthcare space
UNH in the managed care space is a clear leader in terms of its ability to take Optum Care and Optum Health and utilize that to continue to grow revenue. They’ve got strong market share and an environment that is much better from a policy perspective.
Terranova expects UnitedHealth to benefit from a return of elective medical procedures once this new wave of COVID-19 is over and rally “well into the $500s” this year after an over 40% gain in 2021. Earlier on Monday, Degus Wright also said UNH was the one to watch in 2022.
Why Terranova likes XM and IBKR for 2022?
Another name that he likes for 2022 is Qualtrics International Inc (NASDAQ: XM). Making his case for the Utah-based emerging software company, he said:
XM has endured a lot of the selling pressure, and now we can shine the light on what this company really is doing in the experience management for its customers CRM. They’ve invested in growth over the last three years, and now it’ll reflect positively on the balance sheet and free cash flow.
XM is currently trading at $35 a share, but Terranova sees an over 50% upside in the stock. His third pick for 2022 is Interactive Brokers that he says will see more transactions this year amidst higher volatility. Terranova sees IBKR as a way to get crypto exposure as well.