The Australian share market is ending the week on a positive note. In afternoon trade, the All Ordinaries (ASX: XAO) index is up 0.45%.
Four ASX healthcare stocks that are outperforming by some distance and making their shareholders smile today are listed below. Let's see why they are having a cracking run on Friday.
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What's happening?
Firstly, it is worth noting that the healthcare sector as a whole is actually underperforming today.
Investors are not seemingly buying large cap healthcare stocks and are instead snapping up small to mid cap sized stocks.
As we mentioned here this week, Bell Potter has been urging investors to go small now that interest rates are falling. It said:
Small caps are well-placed to outperform over the next year. Small caps have underperformed their large cap counterparts since the end of 2021. A rapid tightening cycle from central banks, a slowing economy and elevated risks of a hard landing have all been headwinds for small caps in Australia and globally.
The tide is turning for small caps as the headwinds experienced over the past three years begin to turn. In our view, this is an opportune time to rotate portfolios towards small caps due to a confluence of favourable factors.
In light of this, investors could potentially be rotating into these ASX healthcare stocks today with the above in mind.
Especially given that one of the ASX healthcare stocks that is rallying today was named among Bell Potter's top picks for when interest rates fall.
That company is Neuren Pharmaceuticals Ltd (ASX: NEU). Its shares are up 11% to $15.03 at the time of writing. Commenting on the company, Bell Potter said:
NEU is a biotech company that is well-funded via its first asset, DAYBUE, which is an FDA approved trofinetide for the treatment of Rett syndrome. NEU's value is from its second asset, NNZ-2591, which is under development for rare diseases. NNZ-2591, if successful, could lead to a significant increase in revenue and earnings when brought to market. NEU looks attractive on a risk/adjusted basis after the recent sell-off.
The broker has a buy rating and $25.00 price target on its shares.
Which other ASX healthcare stocks are charging higher?
Also rising strongly is the Clarity Pharmaceuticals Ltd (ASX: CU6) share price. It is up almost 13% to $8.67 despite there being no market sensitive news out of the pharmaceutical company.
It is a clinical stage company focused on the treatment of serious disease through innovative radiopharmaceuticals.
Another ASX healthcare stock with a focus on radiopharmaceuticals is Telix Pharmaceuticals Ltd (ASX: TLX). Its shares are up 8% to $20.24 at the time of writing.
Finally, the Immutep Ltd (ASX: IMM) share price is up 4.5% to 35 cents on Friday afternoon.
