This industry is poised for extraordinary growth. Here’s how to invest in it.

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Today’s issue in preview:

• This industry is poised for extraordinary growth. Here’s how to invest in it.

• BULLISH: A major transportation player confirms the “bull case” for America

• Railroads, banks, truckers, and billboard advertising run to new highs. And you’re not bullish?

• Learn our Top Themes to buy now

This industry is poised for extraordinary growth. Here’s how to invest in it.

Credit: Drazen Zigic

Over the past year, we have written extensively on how Boomer healthcare is one of the world’s most powerful business and investment megatrends.

More than 10,000 Americans reach retirement age every day. The U.S. population aged 80 and older is projected to roughly double from 14.7 million in 2025 to 29.4 million by 2045.

This is the enormous Baby Boom generation entering the phase of life where health care spending skyrockets. For many boomers, a typical month involves going to see at least one doctor to have something looked at, removed, or treated.

This means many health care businesses are experiencing huge demand now – and will for the next decade.

Investing in many health care businesses will be investing with a gale-force tailwind at your back. If you’re a parent and worried about your child getting a job, just point them to the booming health care industry. And if you like making money, keep it invested in health care.

Our bullish position on this megatrend has been richly rewarded. Health care ETFs are hitting all-time highs. Our proprietary market leader lists feature thriving health care firms.

I’m a firm believer in doing more of what’s working. With that in mind, let’s turn our attention to the cardiovascular health industry.

Heart disease is the leading cause of death in America. In 2023, 915,973 Americans died from cardiovascular disease, including heart disease, stroke, hypertension, and heart failure.

Nearly half of U.S. adults have high blood pressure. About 47% of American adults have hypertension, the leading risk factor for heart attack, stroke, heart failure, and kidney disease.

U.S. cardiovascular healthcare spending is expected to soar. The American Heart Association projects total cardiovascular healthcare costs will more than triple to approximately $1.5 trillion annually by 2050.

Of course, a large industry with huge projected growth will offer significant business and investment opportunities. The cardiovascular health industry includes medical device makers, cardiology clinics, drug makers, diagnostics, and surgical supplies.

Many companies operate in this theme. Some of the bigger (+$50 billion market cap) players are Edwards Lifesciences (EW, heart valve replacements) and Boston Scientific Corp (BSX, various devices and supplies). Plus, our recommendation of the GLP-1 giant Eli Lilly (LLY) can be viewed as a cardiovascular market play, since its drugs help people lose weight, which supports cardiovascular health.

Smaller, sub $5 billion market cap firms in the cardiovascular health theme include Integer Holdings (ITGR), Artivon (AORT), Merit Medical (MMSI), LeMaitre Vascular (LMAT), CVRx (CVRX), AtriCure (ATRC), LivaNova (LIVN), and AngioDynamics (ANGO).

Three firms worth watching are:

Artivion (AORT), a $1.1 billion cardiac and vascular surgery company, is one of the most focused plays in the aortic disease space. The aorta is the main artery carrying blood from the heart to the rest of the body. When it fails, you’re in deep trouble. Artivon makes the preserved biological tissues, surgical grafts, and endovascular systems used to treat these complex conditions. The company just secured FDA approval of the NEXUS Aortic Arch System, the first off-the-shelf solution for aortic arch disease.

LeMaitre Vascular (LMAT) is a $2.2 billion company looking to dominate in the niche of peripheral vascular disease – the narrowing of arteries outside the heart. LMAT has spent decades building a dominant position supplying the tools vascular surgeons rely on every day. These are carotid shunts, biologic patches, vascular grafts, embolectomy catheters, etc. LMAT is often the only or dominant supplier of these unglamorous but mission-critical products. It’s a niche position, but the company is growing 12% year over year, with 72% gross margins that are expanding year over year.

AtriCure (ATRC) is a $1.7 billion company leading the surgical treatment of atrial fibrillation. Its Isolator Synergy Ablation System was the first medical device to receive FDA approval specifically for the treatment of persistent Afib – a meaningful regulatory moat. Its AtriClip Left Atrial Appendage Exclusion System is the most widely sold LAA management device in the world. Revenues are currently growing 14.3% year over year.

Unfortunately, the number of people who need some form of cardiovascular health treatment is huge now and will grow much larger in the future. It’s a structural, multi-decade reality baked into America’s demographics.

Every day that passes, more Americans enter the age group where the risk of heart disease, arterial disease, and atrial fibrillation jumps.

Companies that provide the equipment, devices, supplies, and services to treat those people are poised to benefit from this powerful and predictable megatrend.

BULLISH: A major transportation player confirms the “bull case” for America

Credit: ablokhin

If you’re not sufficiently optimistic on the U.S. economy, perhaps the blowout numbers J.B. Hunt (JBHT) just reported can get you there.

Over the past four months, I’ve written over a dozen research notes analyzing the soaring share prices of highly economically sensitive industry groups, including trucking stocks, regional banks, manufacturing stocks, diesel engine makers, steelmakers, shopping mall operators, and hotel chains.

At the end of each note, I pointed to their soaring stock prices and told readers that the U.S. economy is doing much better than most people think.

These economically sensitive firms are important “real world” indicators.

They almost always do a better job of telling us what is happening in the economy than any media outlet or economist. And their uptrends are moving in a bullish upward direction for the U.S.A.

Last night, one member of this “real world” club – J.B. Hunt confirmed the bull case for the American economy by shooting the lights out during its Q2 earnings report. Earnings increased 45% year over year. Sales increased 19% year over year. In response, the stock jumped 5% this morning, reaching a new all-time high.

J.B. Hunt is one of America’s largest, most important trucking companies. It owns a huge fleet of trucks and trailers that move furniture, appliances, raw materials, clothing, electronics, toys, consumer goods, and more across America.

Trucking isn’t an exciting business the media likes to cover, but it is a critical component of the U.S. economic machine.

Virtually every piece of clothing, every piece of furniture, every package of food, every appliance, every device, every building material, every tool, and every household good purchased in America is transported by truck multiple times on the way to its end user.

Trucking is the economy’s circulatory system. J.B. Hunt’s strong earnings report and new all-time high are strong indicators this system is doing quite well. Invest accordingly!

Market Notes

• Mega banks Royal Bank of Canada (RY), BNY Mellon (BNY), U.S. Bancorp (USB), and Kearny Financial (KRNY) reached new all-time highs today. These are bullish economic signals.

• Railroad giants Union Pacific (UNP), Norfolk Southern (NSC), and CSX Corp (CSX) reached new all-time highs today. These are bullish economic signals.

• Billboard advertising giant Lamar Advertising (LAMR) reached a new all-time high today. This is another bullish economic signal.

• Oil refining giants Valero (VLO), Marathon Petroleum (MPC) and Philipps 66 (PSX) reached new highs today thanks to armed conflict in Iran.

• Our February 18 recommendation to own senior living stocks is paying off. Senior care provider Agilon Health (AGL) is up at new highs today. It’s now up 131% over the last year. Industry giant Welltower (WELL) also reached a new high.

• International money transfer giant Remitly (RELY) is up at new highs along with other fintechs like Sezzle (SEZL). RELY is now up 27% over the last month. 

• Our November 17 recommendation to own biotech continues to pay off. Smaller market cap biotech plays like Atai Beckley (ATAI), Adaptive Biotechnologies (ADPT), and GH Research (GHRS) is all up at highs. 

Regards,

Brian Hunt
Editor, Money & Megatrends

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