1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Dividend King
Dividend King
Articles (71)  | Author's Website |

5 Healthcare Picks for 2012

March 21, 2012 | About:

The healthcare sector is poised for a prospective uptrend in 2012. Biotechnology and service providers, within the healthcare sector, will also experience an positive impact from the driving force rendering momentum to the healthcare sector. With several new product approvals set to enter the healthcare industry, coupled with the financial flexibility of various companies in the sector, it would be optimal for an investor to make his investment in healthcare. Moreover, as there are many small, mid-sized and even large healthcare organizations which remain undervalued, it would be viable for one to invest in these organizations, keeping a medium to long term perspective. Also, with the overall global scenario being favorable for the growth of the healthcare sector, many healthcare stocks that have drastically slumped would regain its value during the uptrend. Following are certain stocks which could be purchased at their current market value, with a medium to long term perspective.

Sanofi-Aventis (NYSE:SNY) is a manufacturer of pharmaceutical products. It is currently trading at around $37, within its 52-week trading range of $40.74 and $30.98. The earnings per share of the company is around $3, while its price earnings is poised at around $13. The company has a healthy dividend yield at around 4%. The market capitalization of Sanofi-aventis is around $100 billion. In relation to its price earnings, the stock currently trades in the multiples of 15. The tear-on-year revenue growth of Sanofi-aventis is around 11%, which is much higher than its contemporary drug manufacturers in the healthcare segment. The company's revenue driver to a great extent is its Genzyme deal, which is also lucrative for its future revenue generation. Sanofi-aventis is currently focusing on long term growth prospects. In my opinion, the company is good for purchasing the stock at its current levels, keeping a long term investment perspective.

Humana (NYSE:HUM) is engaged in rendering healthcare benefits to its customers, with its full-service array of products. The stock is currently trading at around $89, within the 52-week range of $96.46 and $61.28. With earnings per share of around $8, and price earnings of around $10, the company has a market capitalization of around $14 billion. The company has reported revenue of $9 billion for its 2011 fourth quarter, whereas its net income is poised at around $200 million. Humana Inc. has got a strong hold in the Medicare industry, wherein it expects to add around 190,000 new members. At its current market price, and with a price to sales ratio seen at $0.38, the company's stock looks fairly attractive for investment. Moreover, the efforts undertaken by Humana Inc. to regulate its costs, is certain to benefit the company function even better. The company’s initiative to enhance technology and strive for restructuring solutions, has improved its level of efficiency. The company is consistently looking for making optimal investments in new product development. In my opinion, the company could be purchased at its current market price, with a long term perspective.

Echo Therapeutics (ECTE) is a specialty pharmaceutical manufacturing company headquartered in the U.S. Echo Therapeutics, Inc. is currently trading at around $2, within its 52-week range of $4.98 and $1.80. The market capitalization of the company is poised at around $67 million. Currently, the stock is undervalued, however with an uptrend in the healthcare sector, this company is certain to absorb the positive sentiments from the market which would enable it to regain its lost luster. The innovation in blood glucose monitoring system is what the company is focusing on. In fact, the company is taking efforts to innovate the monitoring system, with a potential to replace the traditional finger pricking blood-glucose monitoring. Its symphony system allows the users to access the monitoring of glucose levels even on a smartphone. Moreover, the technology is significant for its use in the intensive care units in the hospitals.

Idenix Pharmaceuticals (IDIX) is involved in treating infectious and viral diseases, through its drug development and implementation of new methods of discovery. The current market price of Idenix Pharmaceuticals is around $12, within its 52 eek range of $15.25 and $2.67. With earnings per share of around $0.60, the company has market capitalization of around $1 billion. The company's projected five year earnings per share is around 28%, wherein 2011 has seen the company to be a clear outperformer. With engaging in rendering co-operation to certain giant, multi-national corporations such as GlaxoSmithKline and Novartis, Idenix Pharmaceuticals Inc. could be perceived as a top line takeover candidate. Moreover, its involvement with Hepatitis research, through effective drug development pertaining to the same, makes the company appear even more attractive at its current market price. In my opinion, Idenix Pharmaceuticals could be purchased at its current market price, with a medium to long term perspective.

Akorn (NASDAQ:AKRX)is a global diagnostic and pharmaceutical drug manufacturer, with its headquarter in the United States. The company is currently trading around $12, within its 52-week highs and lows of $12.88 and $4.97. The market capitalization of the company is around $1 billion, with an earnings per share seen at around $0.60, whereas its price earnings poised at around $20. The company's projected five year earnings per share are estimated at around 27%. In 2011, the stock has experienced an increase of approximately 80%. The company has a price to book around $13, whereas its price to sales is approximately $10. As a pharmaceutical company in the generic niche segment, the company is a global specialty brand for anesthesia and other products pertaining to the management of pain. Along with the positive uptrend in the healthcare sector, the company will certainly impact from a positive upswing in its momentum of stock. In my opinion, Akorn can be purchased at its current market price, with a medium to long term perspective.

About the author:

Dividend King
I am primarily an investor interested in creating passive income streams through dividends. I focus on finding and analyzing dividend paying stocks, MLPs and REITs that are a good fit for income investors.

I practice Judaism and my faith is very important to me. I visit family in Israel once a year, but I am educated and work in the United States where I hold an MBA and a bachelor’s in English. I am a patient man, enjoy wine but am not a connoisseur, and I listen more than I speak.

Visit Dividend King's Website

Rating: 4.6/5 (5 votes)


Please leave your comment:

Performances of the stocks mentioned by Dividend King

User Generated Screeners

Thomas W. Eaton, Sr.Lynch - Stalwart
richsmithRS Value 12/15
CarstinSingapore EV/EBIT 5.0 and belo
jmeekinsCheap Tax Reform
daftheaderNcav div
daftheaderNet net div
JoeKafkaNCAV 3/2014
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat