17 Stock Picks to Buy With High Upside: Bank of America Investing Tips – Business Insider

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  • Small- and mid-cap healthcare stocks have struggled this year, with dealflow drying up.
  • The sector looks undervalued and now could be a good time to buy, according to Bank of America.
  • The bank flagged 17 stocks that could surge by over 60% as M&A activity rebounds in coming months.

Healthcare stocks have struggled in 2022, with the cross-sector ETFs Health Care Select Sector SPDR Fund (XLV) and Vanguard Health Care ETF (VHT) down 8% and 11%, respectively.

But that underperformance has created an investing opportunity, according to Bank of America.

“Healthcare has lagged and sentiment remains cautious,” a team of strategists said in a recent research note. “But we have seen some positive shifts.”

Bank of America is particularly bullish on small- and mid-cap healthcare stocks, which have a market capitalization between $300 million and $10 billion. It’s expecting these stocks to shake off their sluggish start to 2022 as M&A activity picks up.

Eleven SMID-cap healthcare deals have already taken place this year, according to Bank of America, which has put the sector on track for its best M&A performance since 2017.

“The lack of M&A was another contributing reason for underperformance of certain healthcare industries like biotech last year. But deals are picking back up in 2022,” strategists said. “This could be bullish for performance – small cap healthcare stocks typically outperform when M&A is strong.”

Bank of America highlighted 17 small- and mid-cap healthcare stocks to buy. Each offers long-term upside of over 60%, analysts said.

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