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
Lovisa Alvin
Lovisa Alvin
Articles (45) 

Examining the Current State of Health Care and Skin Care Stocks

Health care stocks have all but taken a beating in the past few months

Oil prices sinking slightly lower and consumer spending slipping down the drain. More consumers are worried about the overall state of the markets. This is why some investors place their money in companies that will normally not be impacted by consumer sentiment.

Certain health care companies sell products, which are required, so the investment should come with a minute risk. So how well are health care and skin care stocks doing within the current market conditions? Well, one should look no further than VanEck Vectors Generic Drugs ETF (GNRX) to spot the signs of a struggle. The health care exchange-traded fund entered the market in January and has been met with turmoil ever since.

The stock has decreased by nearly 7% since its debut, and it isn’t the only one that has been hurt. According to analysts, the EPS for generic drug companies has decreased by as much as 14.6%. As for the stocks of generic drug companies, they’ve sunk as much as 32% this year. Some suggest that panic has led to an over selloff, but nonetheless such companies have been hurt by the current conditions. Of course, GNRX isn’t giving up hope. The company holds shares in Albemarle Corporation (NYSE:ALB), ordinary shares and Perrigo Company (NYSE:PRGO). Will they be able to right the ship in the future?

One company that has done surprisingly well is Amphastar Pharmaceuticals (NASDAQ:AMPH). The company’s stock has managed to increase as much as 5% in the past few days. And this is despite sells from big holders and hedge funds. Amphastar has managed to overcome the obstacles of the current market by providing products that are necessities. For instance, the company’s nasal naloxone has proven to be immensely important and has already saved thousands of lives throughout the U.S.

Even though the company has given rebates to state governments for purchasing the drug, it has managed to increase its naloxone revenue substantially. With more and more states jumping aboard and getting their hands on the drug in order to save lives, it is safe to say that naloxone sales will continue to climb higher, and they may very well bring Amphastar and their stock with them. For the first quarter of 2016 and the fourth quarter of 2015, the company managed to post profits and beat forecasts. Suffice to say, it's one of the few companies that has managed to emerge unscathed.

Legal & General Group (LGEN) now owns 21,947 shares of Nu Skin Enterprises Inc. (NYSE:NUS); this is counting the additional 1,178 shares purchased this period. This puts its total worth up to $840,000 for Legal & General Group PLC after the company’s most recent Securities and Exchange Commission Form 13F filing. Capital Fund Management S.A. followed in suit, by increasing their stakes in Nu Skin Enterprises.

It is vital to remember that Nu Skin is a direct competitor of many other skin care product providers, including Lancer Skin Care and STRATA Skin Sciences (NASDAQ:SSKN). Whether or not the competition will have an impact on the company’s revenue remains to be seen, but investors should proceed with caution.

Start a free seven-day trial of Premium Membership to GuruFocus.


Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:



Performances of the stocks mentioned by Lovisa Alvin


User Generated Screeners


pjmason14Momentum
pascal.van.garsseHigh FCF-M2
kosalmmuse6
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
kosalmmuseNice
kosalmmusehan
MsDale*52-Week Low
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)