The healthcare sector is expecting an uptrend in 2012. Therefore, it is feasible to invest in healthcare stocks, which will simultaneously benefit from such an uptrend. The following companies belongs to various areas comprised in the healthcare sector. While some are purely technical in manufacturing and supply of pharmaceutical products to its consumer segments, the others dwell in the arenas of research and development, in order to enhance technology of its existing range of products along with that of products in company's pipeline. Healthcare sector is one of the well diversified sectors, which is optimal for investment decision. One can purchase the below mentioned healthcare stocks, keeping a medium to long term investment plan.
DepoMed (DEPO, Financial)is engaged in manufacturing of oral drug technology in the U.S. The company is currently trading at around $7, within its 52-week trading range of $10 and $4. The company has price earnings to growth ratio of $0.14, while its earnings per share are poised at around $1.50. The market capitalization of the company is around $370 million, whereas its price earnings are approximately $4. Its levered free cash flow to enterprise value ratio is marked to around 12%, whereas its price to free cash flow is seen around $5. The stock has experienced a good month, depicting a gain of around 31%. In my opinion, the stock is undervalued. Moreover, its 5 years estimated growth of 79%, makes the company an attractive option of investment at its current levels. The company is a commercialized pharmaceutical company having a wide array of diversified products catered to the emerging markets. In my opinion, this stock can be purchased at its current market price, with a medium term perspective.
Medtronic (MDT, Financial) carries out its business as a well diversified medical provider primarily in the cardiology industry. The company is currently trading at around $39, within its 52-week highs and lows of $43 and $30. The company has a healthy dividend yield of around 2.40% with an average dividend rate per share of 0.97. Having earnings per share of around $3 and price earnings of around $13, the company has market capitalization of approximately 42 billion. In my opinion, the company is undervalued at its current market price. Moreover, the company pays a healthy dividend, wherein the last five years have seen the company double its dividend to its investors. The company is one of the safest investments to be undertaken in the healthcare sector, considering that the company will be achieving new highs in 2012, in tandem with the trends prevalent in the healthcare sector. The company maintains a high cash balance, while its balance sheet shows financial strength. The high cash balance with the company renders it a freeway to enter any arena of medical practice and technology. Apart from its largest sales force, Medtronic has a diversified pipeline of products.
Laboratory Corporation of America Holdings (LH, Financial) engages in the business of laboratory testing. The company is currently trading at around $88, within its 52-week range of $101 and $75. With earnings per share of around $5, and price earnings of approximately 17, the market capitalization of the company is around $8. The company trading at multiples of 11.5 times has a large room left for its growth. A surge in the healthcare sector will render an uptrend move to the stock of the company. The company's acquisition of Genzyme Genetics can enable it generate higher revenue from its varied testing in pathology. The company's potential for strong growth can also be seen from its secured long-term contractual tie-up's with organizations such as United Healthcare, which enables it to manage and retain its clients. The company keeps a check on its bottom-line, while simultaneously providing liquidity to its investors by its indulging in repurchasing of its shares. In my opinion the company will be optimal to be purchased at its current market rate, keeping a long term perspective in investment.
Gen-Probe (GPRO, Financial) is a pioneer in diagnosing infectious diseases. The company is currently trading at around $68, trading within its 52 week range of &87 and $54. The company has price earnings of around $66, while its earnings per share are poised at around $1. The market capitalization of the company is around $3.15 billion. The company is engaged in new product technology; with all its existing as well as newly launched products adapt advances technology. Moreover, the approval of APTIMA HPV assay and PANTHER by the FDA, will give a favorable boost to the company in accelerating its revenue growth. Also, the company has a strong foothold in the blood screening market, garnered by its partnership with Chiron. An upswing in the healthcare sector will enable the company to further its earnings per share, to a higher level. In my opinion, Gen-Probe can be purchased at its current market price, with a medium to long term perspective.
McKesson Corporation (MCK, Financial) is a significant medical provider within the healthcare sector, supplying and distributing its array of pharmaceutical and beauty care products across the U.S. and Canada. The company is currently trading at around $83, within its 52-week range of $87 and $67. With earnings per share of around $5, and price earnings of around $16, McKesson Corporation has a market capitalization of around $20 billion. The company has free cash flow of around $2 billion, with around $3 depicting its price to book ratio. A beta of around 0.66 reflects the company's lower sensitive to volatility. Apart from offering its pharmaceutical services, the company also undertakes to render health care information technology to its customers. The company has a good cash flow, sufficient to render it financial flexibility to engage into acquisitions or, entering new areas of medical practices. The acquisitions of System C Healthcare and US Oncology can be catalysts to generate growth in the company's performance as well as its revenues. In my opinion, McKesson can be purchased at its current market price, with a long term perspective.
DepoMed (DEPO, Financial)is engaged in manufacturing of oral drug technology in the U.S. The company is currently trading at around $7, within its 52-week trading range of $10 and $4. The company has price earnings to growth ratio of $0.14, while its earnings per share are poised at around $1.50. The market capitalization of the company is around $370 million, whereas its price earnings are approximately $4. Its levered free cash flow to enterprise value ratio is marked to around 12%, whereas its price to free cash flow is seen around $5. The stock has experienced a good month, depicting a gain of around 31%. In my opinion, the stock is undervalued. Moreover, its 5 years estimated growth of 79%, makes the company an attractive option of investment at its current levels. The company is a commercialized pharmaceutical company having a wide array of diversified products catered to the emerging markets. In my opinion, this stock can be purchased at its current market price, with a medium term perspective.
Medtronic (MDT, Financial) carries out its business as a well diversified medical provider primarily in the cardiology industry. The company is currently trading at around $39, within its 52-week highs and lows of $43 and $30. The company has a healthy dividend yield of around 2.40% with an average dividend rate per share of 0.97. Having earnings per share of around $3 and price earnings of around $13, the company has market capitalization of approximately 42 billion. In my opinion, the company is undervalued at its current market price. Moreover, the company pays a healthy dividend, wherein the last five years have seen the company double its dividend to its investors. The company is one of the safest investments to be undertaken in the healthcare sector, considering that the company will be achieving new highs in 2012, in tandem with the trends prevalent in the healthcare sector. The company maintains a high cash balance, while its balance sheet shows financial strength. The high cash balance with the company renders it a freeway to enter any arena of medical practice and technology. Apart from its largest sales force, Medtronic has a diversified pipeline of products.
Laboratory Corporation of America Holdings (LH, Financial) engages in the business of laboratory testing. The company is currently trading at around $88, within its 52-week range of $101 and $75. With earnings per share of around $5, and price earnings of approximately 17, the market capitalization of the company is around $8. The company trading at multiples of 11.5 times has a large room left for its growth. A surge in the healthcare sector will render an uptrend move to the stock of the company. The company's acquisition of Genzyme Genetics can enable it generate higher revenue from its varied testing in pathology. The company's potential for strong growth can also be seen from its secured long-term contractual tie-up's with organizations such as United Healthcare, which enables it to manage and retain its clients. The company keeps a check on its bottom-line, while simultaneously providing liquidity to its investors by its indulging in repurchasing of its shares. In my opinion the company will be optimal to be purchased at its current market rate, keeping a long term perspective in investment.
Gen-Probe (GPRO, Financial) is a pioneer in diagnosing infectious diseases. The company is currently trading at around $68, trading within its 52 week range of &87 and $54. The company has price earnings of around $66, while its earnings per share are poised at around $1. The market capitalization of the company is around $3.15 billion. The company is engaged in new product technology; with all its existing as well as newly launched products adapt advances technology. Moreover, the approval of APTIMA HPV assay and PANTHER by the FDA, will give a favorable boost to the company in accelerating its revenue growth. Also, the company has a strong foothold in the blood screening market, garnered by its partnership with Chiron. An upswing in the healthcare sector will enable the company to further its earnings per share, to a higher level. In my opinion, Gen-Probe can be purchased at its current market price, with a medium to long term perspective.
McKesson Corporation (MCK, Financial) is a significant medical provider within the healthcare sector, supplying and distributing its array of pharmaceutical and beauty care products across the U.S. and Canada. The company is currently trading at around $83, within its 52-week range of $87 and $67. With earnings per share of around $5, and price earnings of around $16, McKesson Corporation has a market capitalization of around $20 billion. The company has free cash flow of around $2 billion, with around $3 depicting its price to book ratio. A beta of around 0.66 reflects the company's lower sensitive to volatility. Apart from offering its pharmaceutical services, the company also undertakes to render health care information technology to its customers. The company has a good cash flow, sufficient to render it financial flexibility to engage into acquisitions or, entering new areas of medical practices. The acquisitions of System C Healthcare and US Oncology can be catalysts to generate growth in the company's performance as well as its revenues. In my opinion, McKesson can be purchased at its current market price, with a long term perspective.
