Founder and Research Chairman, Leeb Group
IQVIA Holdings (IQV) is one of the largest global providers of data and services to the health care industry, explains industry-leading growth stock expert Stephen Leeb, editor of The Complete Investor.
With a healthcare database that far exceeds the storage capacity of supercomputers, it provides proprietary information and analysis on 85% of the world’s pharmaceuticals. It operates in about 100 countries and is constantly updating its database from 120,000 data suppliers.
Its services are essential to efforts by developed countries with aging populations to control healthcare costs and equally critical to developing countries seeking to ramp up health care.
Growth in global health care spending, currently around $8.5 trillion a year, is expected to continue to outpace global GDP growth. With health care relying ever more on big data, IQVIA’s market, which today is an estimated $230 billion, should easily outpace growth in health care spending.
The company’s two major divisions are commercial solutions and research and development solutions. The first includes unique information on pharmaceutical sales and trends that span more than 90 countries.
Also offered is analysis of different treatment protocols, such as side effects and expected outcomes when various drugs are matched with particular diseases.
Cloud-based software for managing clinical trials, help in complying with ever changing government regulations, and ways to protect individual privacy are part of commercial services as well.
The research and development segment is largely dedicated to managing clinical trials. Matching and comparing the constant flow of data across multiple sites with past studies is a huge task.
It requires unique access to massive information and analytic tools that few if any pharmaceutical or biotech companies can manage internally. Presentation of results to regulatory bodies is another critical service offered by this division.
IQVIA resulted from the 2016 joining of IMS Health Care Holdings, the world’s leading provider of health care data, and Quintiles, a major clinical trial outsourcer.
The integration has been smooth, and 2016-17 integration expenses will give way to large revenue and cost synergies this year. Earnings are expected to reach a record level of approximately $5.50 a share, 33% higher than 2015’s high water mark of $4.04 combined for the two entities pre-merger.
Long-term growth in the mid-teens, high free cash flow, a modest P/B ratio, and an international presence make for a compelling story. Our 2020 target is $150.
AUTHOR…INVESTMENT ADVISER…MONEY MANAGER
Stephen Leeb is a prolific author, investment adviser, and money manager who has been analyzing financial markets for more than 40 years. He is known for his prescience in connecting the dots among hidden or overlooked trends – macroeconomic, scientific, and geopolitical – and accurately describing the investment implications, often going against the conventional wisdom. He is the author of nine books on investing and geopolitical trends including his most recent book, China’s Rise and the New Age of Gold: How Investors Can Profit from a Changing World (2020, McGraw-Hill Education). He is founder and editor of the award-winning investment letter The Complete Investor, published by Capitol Information Group, a Washington, D.C.-based financial publisher. Stephen is chief investment officer of his own wealth management firm based in New York City.