One financial advisor believes now is the ideal time to invest in health-care stocks

Investors are turning their attention to the health care sector amidst the current market turmoil, with managing partner Jamie Cox of Harris Financial Group highlighting the potential for good returns in the industry. As the broader market experiences a pullback, Cox sees an opportunity to pick up quality companies at low prices, particularly in the pharma sector.

Cox pointed out that the health care industry is often overlooked by investors, despite the significant profits it generates. He emphasized the potential for growth in the sector, driven by advancements in artificial intelligence and the booming weight-loss drug market. Cox specifically mentioned Novo Nordisk and Novartis as strong investment ideas, citing the potential for innovation in drug delivery similar to the 1990s.

While Novo Nordisk and Novartis have seen divergent performance this year, analysts remain optimistic about their future prospects. The average analyst has a buy rating on Novo and expects shares to climb nearly 8%, while a rebound of more than 14% is anticipated for Novartis. In contrast, Pfizer has underperformed and is on track to finish the year in the red.

For investors seeking diversified exposure to the health care sector, Cox recommended the Vanguard Health Care ETF (VHT), which includes top companies like Johnson & Johnson and Eli Lilly. Despite a recent decline in April, the ETF has still posted a modest gain for 2024.

Overall, Cox sees the current market downturn as a buying opportunity for high-quality health care companies, as they continue to generate strong profits and drive innovation in the industry. Investors may want to consider adding exposure to the pharma sector for potential long-term growth.