In the days and weeks leading up to the start of the coronavirus pandemic, the S&P 500 index was hitting all-time highs. The U.S. stock index achieved its record peak since the Great Recession of 2008 on Feb. 19 of this year when it closed at 3,386.15.
Then, the bottom fell out. By March 23, the S&P 500 hit a record low, closing at just 2,237.40, a more 1,100-point drop from its high just a month earlier.
Even though it's been an extremely rough year for the stock market, increased optimism regarding a successful vaccine, the previous distribution of coronavirus stimulus funds (and hopes for a second round), as well as low interest rates have all helped fuel an impressive rally. On Mon. Aug. 24, the S&P 500 closed at its new all-time high of 3,431.28.
Throughout the pandemic stock market's highs and lows, S&P 500 winners and losers have emerged -- and the winners may surprise you. Healthcare companies Dexcom (DXCM 3.27%), Abiomed (ABMD), West Pharmaceutical Services (WST 2.18%), Regeneron Pharmaceuticals (REGN 0.41%), and IDEXX Laboratories (IDXX 1.63%) may or may not be stocks you've heard of before. Not only have these stocks flourished while others have fallen to abysmal lows, but each has a uniquely promising growth story to tell.
Let's take a closer look.
Image Source: Getty Images.
1. Dexcom
San Diego-based Dexcom is a leader in diabetes care that makes continuous glucose monitoring systems. In 2018, the American Diabetes Association reported that 10.5% of the U.S. population, or more than 34 million Americans, was diabetic. The World Health Organization reports that in 2016, diabetes was behind 1.6 million fatalities across the globe. Diabetes is also one of the morbidities associated with the heightened likelihood of severe illness or death from COVID-19. Given these facts, it's not surprising that the demand for Dexcom's products not only boomed, but exploded during the pandemic.
Dexcom reported its first-quarter 2020 results on April 28. Revenue was up 44% year over year, surpassing $405 million. Revenue growth in international markets was up 61% in Q1, while the company saw its domestic U.S. revenue rise by 39%. Dexcom's revenue was up 34% on a year-over-year basis in the second quarter. Its operating income according to generally accepted accounting principles (GAAP) totaled $67.8 million, representing 15% of the company's total revenue for Q2 2020 ($451 million). Dexcom is projecting a 25% increase in revenue for full-year 2020 to $1.9 billion.
Dexcom has also made its continuous glucose monitoring products accessible to providers in the U.S. and Canada in an effort to increase the safety of frontline medical workers while ensuring diabetes patients receive the care and attention they need during the pandemic.
Shares of Dexcom stayed resolute when the wider market fell in March, and have risen steadily since April. The stock is up nearly 93% year to date.
2. Abiomed
With a market capitalization of nearly $14 billion, Abiomed is a large-cap company that develops and manufactures medical devices. The company is known for its Impella heart pump, the smallest device of its kind in the world.
There's been a fair share of controversy surrounding the Impella RP system over the past year. The U.S. Food and Drug Administration (FDA) sent a letter to healthcare providers on Feb. 4, 2019 indicating that there was an increased incidence of mortality in patients who received the Impella RP system than had been detected in prior premarket clinical studies. However, a subsequent letter sent in May 2019 revealed that subjects showing higher incidence of mortality would not have met the eligibility requirements for premarket clinical studies. This past June, the FDA granted the Impella RP system an emergency use authorization (EUA) for cardiovascular patients who have contracted the novel coronavirus.
In the fiscal year 2020, Abiomed reported a 9% increase in revenue to $840.9 million. Its operating income increased nearly 11%. The company also marked the close of fiscal 2020 with zero outstanding debt and more than $650 million in cash. Abiomed's revenue in the first fiscal quarter of 2021 was down about 21% compared to fiscal Q1 2020, with operating income having decreased 44%. Global sales of Impella were also down 22% in the quarter.
Due to the uncertainty regarding the impact of the COVID-19 pandemic on the 2021 fiscal year, Abiomed is keeping mum about its full-year revenue guidance. However, despite Abiomed's mixed financial performance, the stock is up by more than 80% from its closing price on Jan. 2. Shares of the company have been hovering around $300 since July. 
3. West Pharmaceutical Services
West Pharmaceutical Services fills the void in a less-talked-about side of the healthcare industry. The company makes delivery systems and packaging for pharmaceutical products. It has a market capitalization of nearly $20 billion and pays a dividend (albeit modest) of about 0.24%. The company is a relative newbie to the S&P 500, having just joined the index in May.
Shares of West Pharmaceutical closed at $269.67 on Mon. Aug. 24, just behind the stock's highest share price in the past 12 months, which was $279.54. The stock is up nearly 78% since the beginning of the year.
West Pharmaceutical reported strong sales growth in both the first and second quarters of this year. In Q1, the company's net sales increased by nearly 11%, while net sales were up by more than 12% in the second quarter. The company also boosted its full-year net sales guidance in its Q2 report, which it anticipates to fall in the range of $2 billion to $2.1 billion. In the first half of the year, West Pharmaceutical's free cash flow went up by 42% to $136 million. The company's incredible recession resilience isn't surprising. Its wide-ranging product lineup, which includes cartridge systems, vial containers, and intradermal delivery, are all essential healthcare solutions in high demand during regular times, and even more so during the pandemic.
4. Regeneron Pharmaceuticals
Shares of Regeneron Pharmaceuticals have climbed steadily since February, up an impressive 59% year to date. The stock doesn't come cheap; one share will run you close to $600.
Regeneron reported revenue increases of 33% ($1.8 billion) and 24% ($2 billion) in the first and second quarters, respectively. The company's blockbuster drug Eylea, which treats neovascular (wet) age-related macular degeneration, diabetic retinopathy, and other retinal diseases, recorded U.S. net sales of $1.2 billion in Q1 and $1.1 billion in Q2. Another one of the company's key revenue drivers this year has been eczema medication Dupixent, the product of Regeneron's long-standing antibody drug collaboration with Sanofi (SNY -0.08%). Sales of Dupixent were notably up 129% in the first quarter of 2020. The drug was also recently approved by the FDA for children suffering from mild to severe atopic dermatitis who are between 6 and 11.
Regeneron has several hopeful products in its pipeline. However, the one most investors are watching closely is the dual antibody cocktail solution for COVID-19 it is developing and manufacturing in partnership with Roche Holdings (RHHBY 0.69%) called REGN-COV2. Under the terms of the agreement, Regeneron would manage domestic distribution of REGN-COV2 while Roche would handle its distribution in international markets. After receiving a positive safety review following the phase 1 study, REGN-COV2 is now being evaluated in multiple late-stage trials, including two phase 2/3 studies assessing the candidate's efficacy as a potential treatment and a separate phase 3 study. The phase 3 study is evaluating the efficacy of REGN-COV2 to prevent illness in subjects whose household members have contracted COVID-19.
Regeneron entered into a $450 million contract with the Biomedical Advanced Research and Development Authority (BARDA) back in July to supply the government both treatment doses and preventative doses from the initial lots of REGN-COV2. Of course, this is pending the success of REGN-COV2 at the late-stage clinical studies and the FDA's issuance of an EUA or approval.
5. IDEXX Laboratories
The final stock on our list that has continued to flex its muscles throughout 2020 is IDEXX Laboratories. The company fills a unique niche in animal healthcare, with a variety of products and services including livestock software monitoring systems, microbiological water tests, software for veterinarians, and pet diagnostic tests. IDEXX stock has experienced more than 44% growth since the start of 2020, despite an initial 31% dip when the market fell in March.
IDEXX is contributing to the fight against COVID-19. The company announced in April that it was launching its IDEXX SARS-CoV-2 (COVID-19) RealPCR Test, a coronavirus diagnostic test for pets. In May, the FDA issued an EUA to IDEXX's subsidiary OPTI Medical Systems, Inc. for its reverse transcription polymerase chain reaction (RT-PCR) laboratory test kit for humans that identifies the presence of SARS-CoV-2, the disease that causes COVID-19. The test has also received the European Union's CE Mark certification.
As for the company's balance sheet, IDEXX reported $2.4 billion in revenue last year, boosted by 11% recurring revenue in its Companion Animal Group Diagnostics (CAG) division. The company's revenue growth in Q1 (9% at $626 million) and Q2 (3% at $638 million) was likewise bolstered by its CAG Diagnostics segment, despite the lockdown's adverse impact on routine veterinary visits, which caused delays in diagnostic testing. IDEXX closed the second quarter of 2020 reporting a gross margin of nearly 60% (up 180 basis points year over year) and operating margin over 30% (up 380 basis points year over year).
