Top money managers give prognosis for health stocks

Catherine Wood, founder and CEO of ARK Invest, believes genomics – mapping the DNA building blocks of human life – is going to completely change the health-care landscape.

"Genomics is bringing technology into health care in such a way that we're seeing deflation — price deflation," said Wood, who owns a company called Illumina. That firm has a 90 percent share of all of the base pairs of DNA sequenced in the world, and their prices are falling 40 percent a year.

Companies such as testing firm Foundation Medicine are able to leverage off of that, she said. Illumina develops, manufactures and markets integrated systems for the analysis of genetic variation and biological function. Foundation Medicine develops, manufactures and sells genomic analysis diagnostics for solid and circulating cancers.

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Meanwhile, Christopher Retzler, portfolio manager at Needham Funds, is betting on Thermo Fisher Scientific in the health-care space. "We love the management team there, and we also view it as a platform," he said. "So, they can be a consolidator in the space, they can drive costs down as is needed in the health-care space."

Retzler is also bullish on Gilead Sciences. "They have a great management team, they are a platform company and they've been very successful in M&A, in onboarding those acquisitions, and then driving them to much bigger product markets," he explained.

Wood, who also owns Thermo Fisher, said she is shying away from Cerner Corp., a supplier of health information technology. "A lot of people think that [Cerner] is moving into the cloud, which successful companies will have to do," she said. "They're trying, but their DNA, so to speak, is not right.

"They're having a lot of trouble."

Portfolio manager disclosure: The following stocks mentioned or intended to be mentioned on CNBC's Portfolio Perspective video segment:

Catherine Wood owns shares in Illumina (ILMN).

ARK Invest owns Illumina, Thermo Fisher (TMO) and Cerner (CERN).

Christopher Retzler owns shares in Thermo Fisher and Gilead (GILD).

— By staff