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5 Strong Healthcare Stocks For 2012
Posted by: Vatalyst.com (IP Logged)
Date: March 24, 2012 05:39PM
The healthcare sector in 2012 is expected to depict a positive uptrend. However, one has to be selective in choosing his stocks in the healthcare portfolio. One's selection of stocks should optimally comprise of healthcare equipment makers, pharmaceutical producers, pharmacy retail chains, as well as specialty healthcare providers focusing on research and development. The following are certain stocks within the healthcare sector which could benefit its investors, when purchased at their current market price and with a medium to long-term investment plan.
Psychemedics (PMD) is engaged in detecting abused substances in the United States, by rendering testing services to the employers, physicians, school administration, and the law enforcement agencies. The stock is currently trading at around $10, within its 52-week range of $6.85and $11.12. With an earnings per share of around $0.66, and a price earnings of around 14, Psychemedics shows market capitalization of around $50 million. The company demonstrates a strong dividend yield of around 5%, with a dividend rate of approximately 0.48 per share. The stock has risen around 25% in 2011. In the same year, the company has reported third quarter increase in its earnings by approximately 1.3% at around $6 million. The company's cash and cash equivalents have raised in the third quarter of 2011 by around 34%, to $3.5 million, as compared with its second quarter $2.6 million. The company renders its investors a good return on equity of approximately 32%, which is one of the highest returns in the industry. Having a beta of less than 1, the stock is less volatile with no debt and a solid financial backing, as reflected in its balance sheet. Moreover, the company is certainly good for dividend income. In my opinion, the company could be purchased at its current market price, with a medium to long term investment plan.
Accretive Health (AH) renders services pertaining to healthcare revenue cycle management, to its clientele which comprise of healthcare systems, medical centers, practice groups, independent clinics, and several hospital systems. At around $24, the company is trading within its 52-week range of $19.31 and $32.82. With price earnings of around $120, and earnings per share of approximately $0.20, Accretive Health has a market capitalization of around $2.37 billion. The company's top-line growth, coupled with implementation of margin expansion plans, has aided the company yield revenue improvements which in turn depict increased profitability for the company. Retaining the existing customers of the company, while carrying out strategies to penetrate new customers has always been the prime objective of Accretive Health's revenue cycle management business. Along with the expected uptrend in the healthcare sector, one can forecast a growth in the company's earnings per share ranging from approximately 43% to 100%. Accretive Health Inc. is expected to demonstrate a massive growth in 2012. In my opinion, Accretive Health can be purchased at its current market price, with a medium to long term perspective.
Amerigroup (AGP) renders services to recipients of healthcare benefits. The current market share of the company is around $72, closer to its 52-week high of $75.74. The company's 52-week trading range lies between $37.57 and $75.74 . With earnings per share of around $5, and price earnings of around $15, the company has a market capitalization of around $3 billion. The stock has benefitted its investors to the tune of around 53% since 2011. The stock has shown a good momentum, with its trailing twelve months revenues increased by around 11% to around $6 million. The trailing twelve month earnings per share have increased to approximately $5, from its previous $3. The free cash flows have shown an increase of around 8% per year. The company shows promising prospects of rendering cash return on invested capital of around 24%. In my opinion, Amerigroup can be purchased at the current market price, with a long term perspective.
Thoratec (THOR) is a prominent company within the healthcare sector, rendering service to patients having heart problems. The stock is currently trading at around $35, within its 52-week range of around $25 and $38. With earnings per share of around $1.20 and price earnings of around $29, Thoratec shows a market capitalization of around $2.12 billion. The stock is a safe investment depicting a beta of $0.78. Thoratec Corporation has a good prospect to improve its revenues, and also shows a potential to outperform its competition. The company is good for any investor looking for income as well as performance. Being a market leader in 'Ventricular Assist Device', the company demonstrates ample authority in 'Bridge-to-Transplant' and ' Destination Therapy.' The company has been successful in rendering acute to long term cardiac support. Patients which are regarded ineligible for heart transplant, opt for 'Ventricular Assist Device.' The company maintains a wide spread network for heart and cardiovascular surgeons in the global arena. In my opinion, Thoratec can be purchased at the current market rate, with a long term perspective.
Neurocrine Biosciences (NBIX) is currently trading at around $9, within its 52-week highs and lows of $9.98 and $5.42 respectively. With earnings per share of around $0.67 and price earnings of around $13, the company has a market capitalization of around $567 million. With a beta of 0.32, the company is a safe investment, depicting lesser volatility than its peers. This stock can be termed as a spotlight for investors looking out for a steady stock valuation. The company is engaged in detecting and treatment of neurological disorders and like diseases. The current ratio of 2.81 shows that the company even has the ability to take care of its current obligations. Moreover, the company is debt free. There are various collaborations as well as partnerships which are carried out efficiently by the company. In my opinion, Neurocrine Biosciences can be purchased at its current market price, keeping a medium to long term perspective of investment.
Stocks Discussed: PMD, AH, AGP, THOR, NBIX,