Healthcare companies are pushing the status quo by innovating in areas like drug development and digital health. But speed bumps such as inventory destockings have persisted in the wake of COVID-19, and over the past six months, the industry has pulled back by 10.9%. This drawdown was worse than the S&P 500’s 5.7% decline.

While some businesses have durable competitive advantages that enable them to grow consistently, the odds aren’t great for the ones we’re analyzing today. Taking that into account, here are three healthcare stocks we’re passing on.

Myriad Genetics (MYGN)

Market Cap: $679.3 million

Founded in 1991 as one of the pioneers in translating genetic discoveries into clinical applications, Myriad Genetics (NASDAQ:MYGN) develops genetic tests that assess disease risk, guide treatment decisions, and provide insights across oncology, women's health, and mental health.

Why Should You Sell MYGN?

1. Sales were flat over the last five years, indicating it’s failed to expand this cycle

2. Performance over the past five years was negatively impacted by new share issuances as its earnings per share fell by 34.9% annually while its revenue was flat

3. Push for growth has led to negative returns on capital, signaling value destruction

Myriad Genetics’s stock price of $7.37 implies a valuation ratio of 140.9x forward price-to-earnings. If you’re considering MYGN for your portfolio, see our FREE research report to learn more .

IQVIA (IQV)

Market Cap: $26.57 billion

Created from the 2016 merger of Quintiles (a clinical research organization) and IMS Health (a healthcare data specialist), IQVIA (NYSE:IQV) provides clinical research services, data analytics, and technology solutions to help pharmaceutical companies develop and market medications more effectively.

Why Does IQV Worry Us?

1. Constant currency revenue growth has disappointed over the past two years and shows demand was soft

2. Estimated sales growth of 3% for the next 12 months is soft and implies weaker demand

3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

At $149.60 per share, IQVIA trades at 13x forward price-to-earnings. To fully understand why you should be careful with IQV, check out our full research report (it’s free) .

Repligen (RGEN)

Market Cap: $8.16 billion

With over 13 strategic acquisitions since 2012 to build its comprehensive bioprocessing portfolio, Repligen (NASDAQ:RGEN) develops and manufactures specialized technologies that improve the efficiency and flexibility of biological drug manufacturing processes.