Insulet tops S&P 500 growth chart for Q2 as it gains market share in the diabetes space

The Health Care Select Sector SPDR Fund ETF (NYSEARCA:XLV), tracking the healthcare companies under S&P 500, rose 0.11% in the second quarter of 2024, lagging behind the broader S&P 500 index which rose 4.30%.

Insulet (PODD) saw the biggest growth in the S&P 500 healthcare index, rising about 25% as it continues to gain market share in the type 1 diabetes market.

Eli Lilly (LLY) came in second, rising nearly 16.31%, as it continues to ride the weight loss frenzy.

The overall sector saw a gradual drop in April as major pharmaceutical companies reported their earnings but has risen steadily till end of June with a slight dip in end of May.

Industries Q2 performance

The Health Care Equipment & Services sector and Pharmaceuticals, Biotechnology and Life Sciences fell 3.3% each in the second quarter of the year.

The healthcare-focused ETF had a net flow of -$1.53M in the quarter.

Top 5 S&P 500 healthcare performers in Q2:

Insulet Corporation (PODD) +24.95%

Eli Lilly and Company (LLY) +16.31%

Moderna (MRNA) +14%

Boston Scientific (BSX) +13.48%

Vertex Pharmaceuticals (VRTX) +13.27%

Bottom 5 S&P 500 healthcare performers in Q2:

Solventum Corporation (SOLV) -36.56%

Molina Healthcare (MOH) -27.29%

Align Technology (ALGN) -23.86%

Walgreens Boots Alliance (WBA) -23.65%

CVS Health (CVS) -23.56%

What Analysts Expect

SA analyst John Bowman suggests, “The SPDR Healthcare Sector ETF is ripe for buying at the moment due to several factors, including inelastic demand for its products and services; stunted valuation, and recent underperformance compared to other sectors. There is a lot of room for growth in this sector as the population expands, health insurance coverage rises, and companies work toward refining their profit margins.”

Bowman further adds, “There are some risks still present in the sector, such as the impending "patent cliff" that could cause a major loss in sales of name-brand drugs as they go generic, as well as shifting Medicare and Medicaid rules around prescription pricing.”

Seeking Alpha analysts recommend a Buy for the sector.

What Quantitative Measures Say

XLV has a Buy rating from Seeking Alpha’s Quant Rating system with a 3.84 score out of 5. This comes largely from an A+ in liquidity and dividends, countered by a C in Risk and a B+ in Momentum.