Healthcare Sector Champions: Applying Benjamin Graham's Proven Value Strategy to Modern Market Picks - December 2025

Benjamin Graham, the legendary founder of security analysis whose wisdom continues to shape modern investing decades after his 1976 death, advocated for a disciplined approach centered on low valuations and solid operational fundamentals. His investment vehicle achieved approximately 20% annual returns from 1936 through 1956, substantially surpassing the market’s 12.2% average performance during the same period. Graham’s mentorship shaped investing titans like Warren Buffett and inspired luminaries including John Templeton and Mario Gabelli—each credited with leveraging his core principles to build substantial wealth.

Today’s healthcare landscape offers several compelling opportunities for practitioners of Graham’s value-oriented philosophy. These selections have been evaluated against rigorous screening criteria including price-to-book ratios, price-to-earnings multiples, capital structure efficiency, and projected long-term earnings trajectories.

Leading Healthcare Positions for Value-Conscious Investors

Molina Healthcare Inc (MOH): Mid-Cap Healthcare Leader with 86% Strategy Alignment

This mid-cap managed healthcare provider scores highest among our selections, achieving an 86% rating under Graham’s valuation framework. Operating across Medicaid, Medicare, Marketplace, and specialized segments, Molina arranges healthcare services through an extensive provider network encompassing independent practitioners, hospital systems, ancillary vendors, and pharmaceutical partners.

The company’s fundamental profile demonstrates particular strength in sector classification, revenue generation, debt management, and earnings trajectory. Notably, both valuation metrics—the price-to-book and price-to-earnings ratios—signal attractive entry points. The organization’s current liquidity position remains sound, supporting operational resilience. An 86% alignment score typically signals meaningful strategy interest, while readings exceeding 90% denote pronounced conviction.

Healthcare Equipment & Services: The 71% Cohort

Three prominent healthcare equipment and service providers each received 71% ratings, indicating moderate alignment with Graham’s principles:

ResMed Inc (RMD) represents a large-cap position within medical device manufacturing and cloud-based healthcare software. The company develops diagnostic, therapeutic, and disease-management solutions for respiratory ailments, including sleep-disordered breathing and chronic pulmonary conditions. Beyond device manufacturing, ResMed operates software-as-a-service platforms supporting out-of-hospital care delivery across the United States and Germany.

ResMed’s screening profile shows strength across sector metrics, sales performance, liquidity, debt ratios, and earnings growth projections. However, both valuation indicators—price-to-earnings and price-to-book multiples—fail to meet Graham’s stringent thresholds, suggesting the market has already incorporated growth expectations into the current price.

West Pharmaceutical Services Inc (WST) functions as a global manufacturer of advanced containment and delivery infrastructure for injectable pharmaceuticals and healthcare solutions. Operating through Proprietary Products and Contract-Manufactured divisions, West supplies elastomers, primary containment systems, drug delivery devices, and integrated solutions to biopharmaceutical, generic pharmaceutical, and medical device manufacturers.

West’s fundamental assessment reveals passing marks across sector, sales, liquidity, and debt categories, alongside robust long-term earnings trajectory. Similar to ResMed, however, valuation multiples present headwinds to Graham-adherent strategies, with both price-to-earnings and price-to-book metrics exceeding acceptable thresholds.

Centene Corp (CNC): Healthcare Services with Selective Criteria Fit

Centene, operating as a large-cap healthcare facilitator, achieved a 71% alignment score despite mixed performance across specific tests. The organization delivers integrated services to government-sponsored and commercial healthcare initiatives, emphasizing coverage for underinsured and uninsured populations.

Centene’s portfolio encompasses Medicaid (including TANF, expansion programs, ABD, CHIP, and long-term support services), Medicare Advantage offerings, commercial health insurance products, and marketplace solutions. While the company demonstrates strength in sector standing, sales metrics, and valuation ratios, current ratio and long-term debt assessments warrant attention.

Intuitive Surgical Inc (ISRG): Robotic Surgery Pioneer and 71% Candidate

Intuitive Surgical, the large-cap innovator behind da Vinci surgical platforms and Ion endoluminal systems, achieved a 71% score. The company specializes in robotic-assisted surgery across general surgery, urology, gynecology, cardiothoracic, and head-and-neck specialties. The Ion platform extends capability into minimally invasive diagnostic and endoluminal procedures.

Intuitive’s fundamental scorecard shows passing results across sector, sales, liquidity, debt, and earnings metrics. Yet consistent with other growth-oriented healthcare plays, valuation multiples—both price-to-earnings and price-to-book—exceed Graham’s comfort zones, suggesting premium pricing relative to book value and near-term earnings capacity.

Graham’s Legacy and Modern Application

The principles Benjamin Graham championed—seeking undervalued securities with robust balance sheets and consistent earnings power—remain remarkably relevant across market cycles. His systematic approach to security analysis transformed investing from speculation into disciplined science, establishing methodologies that continue guiding professional investors and individual market participants alike.

Graham’s framework particularly resonates within healthcare, where long-term demographic trends and regulatory structures create identifiable, analyzable value drivers. The sector’s essential nature and recurring revenue models align naturally with his preference for businesses exhibiting durable competitive advantages and predictable cash generation.

Whether pursuing full-spectrum healthcare exposure or sector-specific strategies, applying Graham-derived principles offers a proven pathway toward disciplined portfolio construction grounded in fundamental value rather than market momentum.