9 Healthcare Stocks Predictive Analysts Expect To Outperform

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 |  Includes: ACOR, AMAG, BCR, FMS, FRX, HALO, TMO, VAR, ZOLL
by: Kapitall

Analyst ratings are a great guide to what the market is thinking about a company’s outlook, but finding groups of analysts that have a history of predicting stock performance is even better.

When those analysts become more optimistic about a company, it’s a signal to take a second look.

Using analyst ratings from Reuters that are presented on a linear scale (with 1 = "Strong Buy" and 5 = "Strong Sell"), we sliced the ratings data of stocks from the healthcare sector into three monthly time periods, and identified the groups of analysts that have shown predictive value over two consecutive time periods.

We further narrowed down the list by only focusing on those stocks that have seen bullish trends in recent analyst opinion.

Although past performance is no guarantee of future results, the recent accuracy of these analyst ratings suggests their opinions may be a helpful starting-off point for your own analysis.

Do you think these analysts will continue to accurately predict these stocks’ movements?

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 (NYSEARCA:SPY) index over the last month.

(Click chart for more detail)



Use this list as a starting-off point for your own analysis.
List sorted by market cap.

1. Fresenius Medical Care AG & Co. KGAA (NYSE:FMS): Provides products and services for patients with chronic kidney diseases. Market cap of $22.45B.

Mean average rating changed from 1.83 to 1.73 between 07/28/11 and 08/27/11 (bullish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 8.38%.

Analysts also got it right between 08/27/11 and 09/26/11, with the mean rating changing from 1.73 to 1.8 (bearish change). Over the following month, the stock generated an alpha of -4.2% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 1.8 to 1.67 between 09/26/11 and 10/26/11 (i.e. bullish change). The stock has gained 17.1% over the last year.

2. Thermo Fisher Scientific, Inc. (NYSE:TMO): Provides analytical instruments, equipment, reagents and consumables, software, and services for research, manufacture, analysis, discovery, and diagnostics. Market cap of $18.47B.

Mean average rating changed from 1.31 to 1.33 between 07/28/11 and 08/27/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -3.34%.

Analysts also got it right between 08/27/11 and 09/26/11, with the mean rating changing from 1.33 to 1.38 (bearish change). Over the following month, the stock generated an alpha of -11.81% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 1.38 to 1.33 between 09/26/11 and 10/26/11 (i.e. bullish change). It's been a rough couple of days for the stock, losing 5.38% over the last week.

3. Forest Laboratories Inc. (NYSE:FRX): Develops, manufactures, and sells branded and generic forms of ethical drug products. Market cap of $8.46B.

Mean average rating changed from 2.5 to 2.52 between 07/28/11 and 08/27/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -3.89%.

Analysts also got it right between 08/27/11 and 09/26/11, with the mean rating changing from 2.52 to 2.55 (bearish change). Over the following month, the stock generated an alpha of -8.3% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.55 to 2.53 between 09/26/11 and 10/26/11 (i.e. bullish change).

The stock is a short squeeze candidate, with a short float at 9.5% (equivalent to 7.2 days of average volume). The stock has lost 8.71% over the last year.

4. CR Bard Inc. (NYSE:BCR): Engages in the design, manufacture, packaging, distribution, and sale of medical, surgical, diagnostic, and patient care devices worldwide. Market cap of $7.23B.

Mean average rating changed from 2.77 to 2.81 between 07/28/11 and 08/27/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -2.42%.

Analysts also got it right between 08/27/11 and 09/26/11, with the mean rating changing from 2.81 to 2.83 (bearish change). Over the following month, the stock generated an alpha of -11.47% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.83 to 2.76 between 09/26/11 and 10/26/11 (i.e. bullish change).

The stock has gained 0.66% over the last year.

5. Varian Medical Systems Inc. (NYSE:VAR): Designs, manufactures, sells, and services equipment and software products for treating cancer; and x-ray products worldwide. Market cap of $6.66B.

Mean average rating changed from 2.27 to 2.42 between 07/28/11 and 08/27/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -6.62%.

Analysts also got it right between 08/27/11 and 09/26/11, with the mean rating changing from 2.42 to 2.36 (bullish change). Over the following month, the stock generated an alpha of 4.37% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.36 to 2.33 between 09/26/11 and 10/26/11 (i.e. bullish change).

The stock has lost 6.93% over the last year.

6. Halozyme Therapeutics, Inc. (NASDAQ:HALO): Engages in the development and commercialization of recombinant human enzymes that transiently modify tissue under the skin to facilitate injection of other therapies or correct diseased tissue structures for clinical benefits. Market cap of $877.66M.

Mean average rating changed from 1.29 to 1.38 between 07/28/11 and 08/27/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -6.38%.

Analysts also got it right between 08/27/11 and 09/26/11, with the mean rating changing from 1.38 to 1.33 (bullish change). Over the following month, the stock generated an alpha of 29.82% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 1.33 to 1.22 between 09/26/11 and 10/26/11 (i.e. bullish change).

The stock is a short squeeze candidate, with a short float at 5.44% (equivalent to 7.08 days of average volume). Exhibiting strong upside momentum--currently trading 31.9% above its SMA20, 36.31% above its SMA50, and 34.05% above its SMA200. The stock has had a couple of great days, gaining 17.8% over the last week.

7. Acorda Therapeutics, Inc. (NASDAQ:ACOR): A commercial stage biopharmaceutical company involved in the identification, development, and commercialization of therapies for multiple sclerosis (NYSE:MS), spinal cord injury, and other nervous system disorders. Market cap of $874.50M.

Mean average rating changed from 2.33 to 2.42 between 07/28/11 and 08/27/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -14.03%.

Analysts also got it right between 08/27/11 and 09/26/11, with the mean rating changing from 2.42 to 2.46 (bearish change). Over the following month, the stock generated an alpha of -3.47% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.46 to 2.31 between 09/26/11 and 10/26/11 (i.e. bullish change).

The stock is a short squeeze candidate, with a short float at 11.4% (equivalent to 8.18 days of average volume). The stock has lost 18.84% over the last year.

8. ZOLL Medical Corp. (NASDAQ:ZOLL): Develops, manufactures, and markets resuscitation devices and related software solutions worldwide. Market cap of $827.81M.

Mean average rating changed from 1.6 to 1.67 between 07/28/11 and 08/27/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -7.05%.

Analysts also got it right between 08/27/11 and 09/26/11, with the mean rating changing from 1.67 to 1.8 (bearish change). Over the following month, the stock generated an alpha of -8.61% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 1.8 to 1.7 between 09/26/11 and 10/26/11 (i.e. bullish change).

The stock has gained 12.11% over the last year.

9. AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG): Engages in the development and commercialization of a therapeutic iron compound to treat iron deficiency anemia (NYSE:IDA). Market cap of $300.83M.

Mean average rating changed from 2.5 to 2.44 between 07/28/11 and 08/27/11 (bullish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 3.83%.

Analysts also got it right between 08/27/11 and 09/26/11, with the mean rating changing from 2.44 to 2.5 (bearish change). Over the following month, the stock generated an alpha of -8.05% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.5 to 2.25 between 09/26/11 and 10/26/11 (i.e. bullish change).

The stock is a short squeeze candidate, with a short float at 11.32% (equivalent to 5.9 days of average volume). The stock has lost 28.73% over the last year.

*Ratings sourced from Reuters, price data sourced from Yahoo! Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.