We are making a significant move in the stock market by purchasing 50 shares of GE Healthcare at approximately $81.51. This transaction leads to Jim Cramer’s Charitable Trust owning 975 shares, increasing its weighting from about 2.1% to 2.2%. In the midst of the recent sell-off, we are seizing the opportunity to buy back 50 of the 75 shares we sold in late September when the stock briefly reached a new all-time high in the low $90s. Consequently, we are upgrading our rating back to a 1. Over the past two sessions, the shares have declined by about 4%, with a 3.4% pullback on Thursday following the company’s investor day. This two-day dip continues a downward trend that began from the high $80s per share after the November 5 presidential election. At that time, healthcare stocks started to slide due to concerns about policy changes. GE Healthcare also faced challenges from rising long-term rates as its equipment is often purchased with financing, and higher rates pose a problem. Additionally, there were worries about tariffs on Chinese imports.
Investor Day Highlights and Growth Areas
The company’s investor day provided an excellent opportunity for management to share its vision and precision-care strategy and outline key growth areas. GE Healthcare is widely recognized for selling medical equipment such as MRI and CT machines, but its pharmaceutical diagnostics business is currently the most exciting. This unit has two new products that currently generate very little revenue but have the potential to become a $1 billion revenue opportunity in the future. One of the most promising products is Flyrcado, a recently approved PET imaging agent for the detection of coronary artery disease. The company believes this product could generate an annual revenue of over $500 million by 2028, although some analysts consider this to be a conservative estimate. The second product is Vizamyl, a PET imaging agent used in the detection of Alzheimer’s disease. GE Healthcare expects Vizamyl to generate a revenue of over $200 million by 2028.We have also been fascinated by GE Healthcare’s potential to benefit from artificial intelligence. The concept is that as the company’s machines become more intelligent and effective through the integration of AI software and tools, hospitals will be inclined to upgrade their existing equipment to take advantage of these efficiency gains. During the investor day, the company emphasized its opportunities in digital innovation and AI-enabled devices. It is currently selling about $1.2 billion in digital revenue, and executives foresee this growing by about 50% by 2028, providing an additional $600 million in revenue.