Are CADILA, CIPLA, BIOCON the new stocks to invest in for the long term?
- Asked By
- Updated On:25-May-2021
- Replies:2
Short Answer
CADILA, BIOCON, CIPLA might be the stocks of tomorrow as they have provided significant returns owing to the pandemic and the demand for medicines and medical equipment that they produce. Furthermore, the demand will continue to surge even if the pandemic is controlled, ensuring that enough storage of medicines to prevent such a pandemic from arising is prevented.
Detailed Answer
The pandemic has undoubtedly bought great levels of attention and spotlight towards multiple healthcare-oriented companies. While such companies are thriving under such depressive times, it’s quite factual that the companies such as BIOCON, CADILA, CIPLA are thriving, all thanks to the surplus investments and attributes made in the field by governments and other investors. In turn, causing their stocks to rise in price.
But then are they great investments in the long term? Do they provide any beneficial impact over 5-10 years? Well, to answer that question, let’s take a look at the various healthcare stocks that are zooming past their valuations that nobody would have predicted.
Why might you want to invest in healthcare stocks right now?
• Healthcare stocks are on the brink of booming if not already boomed past their valuations. Owing to the pandemic, they have seen greater investments and spotlights from major investors that have helped attract potential long-term investors.
• The healthcare and pharmaceutical industries comprising companies such as CIPLA, BIOCON, LUPIN, CIPLA, ABBOTT INDIA, CADILA, and so on have helped the country greatly and still are producing huge quantities of medicines and medical requirements.
• Furthermore, these stocks should hold their valuation over time as the pandemic cannot be eliminated overnight. Instead will take quite some time till the vaccines are broadly available.
• Speaking about vaccines, the companies are trying hard and fast in ensuring that they grow their manufacturing pace and ensure that a feasible amount of vaccines are being produced monthly. The more the production, the greater the revenue, the more chances of the stock rising greatly.
• However, people might think that the valuation is a bubble waiting to burst that might cause the valuation to stumble. Well, you’re right; it might happen. There might be a correction of sorts. But it wouldn’t be that drastic as even to control the pandemic and bring it under control; you require medicines and constant treatment, which these companies will manufacture in vast quantities.
Conclusion
Healthcare stocks such as CADILA, CIPLA, BIOCON have risen to fame due to the pandemic and the adverse situation that the country and the world face today. But even then, these stocks are potentially going to have a broader outcome as the demand for medicines and the vaccines that have to be supplied will be in constant demand for the coming years. Moreover, to prevent such a pandemic from arising, there would be constant pressure to up their production cycle and to prevent disastrous scenarios as such from arising ever again.
Thus, if you’re looking into investing in these stocks for the long term, then go ahead. However, do keep in mind that not all healthcare stocks would grow. So instead, do your research and analysis right to figure out the ones that might have the potential of growing and providing returns over the long term.
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Discussion (1)
One can either invest in bluechip companies or research extensively on the companies they feel would give returns. It also comes down to the type of investment they are ready to make. Hence, figuring out the different companies could take time, experience, and research.
Undertaking fundamental analysis and proper research is essential before investing in any particular stock. Apart from this, you should also consider asking seven key questions like 'What does the company do', 'How is it placed among its peers', 'How is the management of the company', etc before investing in it.
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There are various terms that play a huge role in determining how to choose stocks for long term investment such as P/E ratio, dividend consistency, etc. For a more elaborative information head below and read the explanation given for better understanding.
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Healthcare stocks are quite beneficial in the given day and age, all thanks to its impact on the country. They have grown in the evaluation and even providing considerable returns that nobody would have predicted. Therefore, research the stocks that you wish to invest in in the long term and see how it pans out over 10-20 years.
There are several questions that one can ask your advisor. These questions include whether its good time to enter or exit the market? Should in exit from debt and move to FD? do I continue my SIP portfolio? and other such questions.
SIPs or a Systematic Investment Plan is a great tool to build money in the long run with a minimum time period of 5-10 years. It offers multiple advantages like a low minimum capital requirement, averaging benefit, formation of investing habits, etc. However, the most adequate time to stop your SIPs is when your financial goals are met or when you feel to change the objective of your investments.
For significant returns, one can look forward towards stock funds, real estate investments, dividend stocks, target-date funds and so on. Each one of these investments does offer something better to investors based on their capital of investments made.
Every Equity Investor should maintain some part of their portfolio diversified into foreign companies. This can be achieved through Foreign brokers or Mutual Funds and ETFs that invest in abroad markets. Investing abroad has many benefits such as exposure to the top global companies like Facebook, Amazon, Ford, etc. The tax implications on investments made outside India are different as foreign Equity is taxed as Debt Mutual Funds
Harshil Patel
There's no saying whether they are the stock that you might want to invest in the coming future. However, they do provide significant returns to their investors for intraday trading and swing trading.