(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — In a technology innovation cycle like the PC revolution, dotcom, wireless, dotcom 2.0, cloud computing, AI, etc, investing broadly across the category makes sense because as spending rises, the tide lifts all (most) boats. It’s hard to find a name associated with the theme that doesn’t work, the winners are far more ubiquitous. You can buy “the chips” or “the servers” or “the routers” and you’ll probably make money. In this way, tech reminds me of energy, mining, autos, airlines — areas of the market where the big picture is more meaningful than the differences between the companies (although, of course, these matter — JetBlue is not Delta, Intel is not Nvidia). With the healthcare sector — specifically the pharma and biotech giants — it’s much harder. Yes, you can benefit from a sectorwide re-rating as many investors are today. But you also kind of need to know the names, their history of execution, the turnarounds, the science and the addressable markets they are going after. This is not at all like choosing between Exxon and Chevron. Sean’s going to look at the recent rotation into large cap healthcare market-wide, which is also playing a role in the composition of our Best Stocks in the Market list. I will be back with some commentary on AbbVie (ABBV) , Amgen (AMGN) and Eli Lilly (LLY) , three of our Best Stocks names in the right sector at the right time. Sector leaderboard As of Nov 17, there are 198 names on The Best Stocks in the Market list. Top sector ranking: Top industries: Top 5 best stocks by relative strength: Spotlight Sean — Market leadership has been churning under the surface. Over a three-day stretch last week, healthcare outpaced the S & P 500 by 5.7%, marking the most relative strength since 2008. The bull market has been powered by tech leadership, and that’s reflected in its outsized presence in both the S & P 500 and our Best Stocks list. Still, trends evolve and a few under-the-radar sectors are beginning to show signs of life. As of last week, only 43% of S & P 500 stocks were trading above their 20-day moving averages. Tech, the market’s primary engine this cycle just stalled, with only 25% of the sector above that trend line. Meanwhile, the value-oriented groups are suddenly in the lead: energy has 100% of its constituents above their 20-day moving average, and healthcare sits at 66%, leading all sectors. This isn’t a declaration of a new leadership regime for the market. It’s an observation that a larger share of names in those sectors are in short-term uptrends relative to tech and the market overall. We have 23 healthcare names on the list as of this morning. LLY was the best performing stock on our list last week, you can see it’s in total breakout mode: In addition to the market bidding up beaten down healthcare names, LLY saw 4 analyst upgrades and 2 reaffirms, right in time for a breakout past spring 2025 highs. Zoom out a little further and you’ll see this is the first time LLY has seen new highs since last summer. The fundamentals are backing this move, too. They just reported 54% top-line revenue growth, with several of their key drugs posting triple-digit figures. LLY’s Cardiometabolic drugs Mounjaro and Zepbound reported Q3 revenue growth of 109% and 184% respectively, year-over-year. AbbVie (ABBV) and Amgen (AMGN) are two biotech leaders pushing toward all-time highs. AbbVie has been the standout performer, returning 36% over the past year versus 12% for Amgen and 14% for the XBI. It also carries stronger growth expectations, with analysts looking for 34% EPS growth next year. Management expects to expand operating margins in the coming quarters through SG & A cost reductions and better-than-anticipated revenue drivers. Amgen, by contrast, is in investment mode. R & D spending rose 31% year over year as the company increased funding for later-stage clinical programs. In Q3, management emphasized how Amgen is integrating AI across manufacturing, clinical trials, and early drug discovery — accelerating molecule design and other key elements of its research pipeline and reducing costs in perpetuity. Risk Management Josh — Looking at the LLY chart below, it’s hard not to say “I missed it!” and you might have a little. But here’s the thing, zooming out gives you the context to understand that we may be just at the beginning of something rather than at the end. If your fundamental research leads you to the conclusion that LLY is on the verge of having a great year in 2026, the recent price action shouldn’t scare you away. I’m showing you the three-year look at LLY above (weekly). This breakout has been years in the making. The consolidation period’s highs, in the $950 – $960 area, should serve as support should the stock retrace some of the last week’s furious earnings-driven rally. Investors with no position here should watch that level as an opportunity to get long. If it holds and the stock begins to rebound, you know the longs are serious. AbbVie is a $400 billion market cap giant with a 3% dividend yield and a stock chart that has been going up and to the right for ten straight years. I would give it the benefit of the doubt and want to be long here. I’d use the rising 200-day as rolling stop, updating it at the end of each week. That’s 13% downside from today’s level. I think the higher likelihood is we retest the October blow-off top you can see in the chart above. Above, the long-term view with AbbVie’s actual + expected annual revenue in orange and blue. There’s a reason this stock has done what it’s done. The company’s execution has been incredible. I think it sees 275 before 200, even if you have to wait awhile. Okay, let’s do Amgen. This one’s simple. Here’s a stock that’s spent the last fifteen years in a massive uptrend. You can see the stock broke out in 2012 and basically never looked back: But we can’t have the prices from 2012 back, so let’s zoom in on today. Below I am showing you a one year chart with the stock taking out the spring highs on a great earnings report. RSI is overbought in the mid-70’s so I would give it a week or two to cool off. There will be some profit-taking but hopefully the buyers will remain in control and defend the $320’s area breakout. I’m taking you back slightly further in the chart below… Last week Amgen got above an even more meaningful level, the September 2024 highs. For me, pulling it back tells me we are less extended than the one-year chart would otherwise indicate. This is an important way to regulate our feelings about trade set-ups and remind ourselves that just because we missed a rally doesn’t mean the whole opportunity is now gone. That’s a 200-week moving average in blue, showing an almost perfect support line. Traders can ignore that, it’s too far away from current price — similar to ABBV, I think a low-volume pullback that doesn’t violate the breakout level is a better entry than today. Longer-term investors can get invested today without waiting. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC” TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.
The healthcare sector is having its market moment. How to find the Best Stocks in the space
