Investing in health-care stocks that occupy a niche position in a growing market is a solid bet, Vadim Alexandre, health-care analyst at Daniel Stewart told CNBC on Friday.
Click here to watch the full interview with Vadim Alexandre
His top picks are Immunodiagnostic Systems , Cryo-Save , and Asterand .
Immunodiagnostic Systems, a company that specializes in developing vitamin D testing kits to detect diseases, has performed very well over the past two years, Alexandre said.
“You’re looking at a stock price increase of about 600 percent because they happened to be in the right niche.” Vitamin D testing has become a biomarker of almost every type of disease, Alexandre said.
“It initially started out as being a biomarker of bone-related diseases such as arthritis, but increasingly it’s being recognized as a biomarker for various types of cancer.”
“There’s strong growth in the sector, and they are benefiting from it,” he said.
Alexandre also singled out Cryo Save as a top pick.
The bio-banking specialist stores umbilical cord blood from newborn babies, which can then be used in case of blood-based disorders.
“The cord blood is stored, almost as an insurance policy, against the child contracting diseases in the future.
It’s currently used for about 80, mostly blood-based disorders, but also some neurological disorders such as cerebral palsy.
"Every year that list is growing,” Alexandre said.
Customers pay about 2,000 euros ($2,780) up front to have their children’s cord blood stored for about a 20-year period.
Asterand, a tissue supply specialist that stores tissue for pharmaceutical research purposes was also a good bet, Alexandre said.
The company recently announced a major contract with the National Cancer Institute in the US.
“They have never had such a large contract … and the share price hasn’t really reflected that bit of news,” he said.
Disclosures: Daniel Stewart holds Immunodiagnostic Systems, Cryo-Save, and Asterand shares, but Vadim Alexandre does not own the stocks.