Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message| ()  

The healthcare sector may be an interesting consideration for investors concerned about fluctuations in the market – because demand for healthcare is relatively constant despite the performance of the economy, healthcare stocks are less exposed to economic cycles.

We ran a screen on the healthcare sector for those trading at steep discounts to their analyst target prices, which may indicate that they are undervalued.

But because target prices are notoriously inflated, we only used the most pessimistic (the lowest) target prices, and for stocks with sufficient analyst coverage we only screened for stocks with 5 or more analyst ratings.

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 index over the last month. To access a complete analysis of this list's recent performance, click here.


(Click to enlarge)

Do you think these stocks are being undervalued and should be trading higher? Use this list as a starting-off point for your own analysis.

List sorted by potential upside implied by target price.

1. Tornier N.V. (TRNX): Operates as a medical device company that designs, manufactures, and markets devices for joint replacement and soft tissue repair that enable surgical specialists to improve patients' lives by restoring motion and physical vitality. Market cap of $756.37M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $26.00. This implies a current upside of 34.65% from current levels around $19.31. The stock is currently stuck in a downtrend, trading 11.67% below its SMA20, 10.08% below its SMA50, and 14.46% below its SMA200. It's been a rough couple of days for the stock, losing 20.01% over the last week.

2. Amyris Biotechnologies Inc. (AMRS): An integrated renewable products company, offers renewable compounds for a variety of markets. Market cap of $631.83M. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $19.00. This implies a current upside of 34.28% from current levels around $14.15. The stock is a short squeeze candidate, with a short float at 12.18% (equivalent to 15.68 days of average volume). It's been a rough couple of days for the stock, losing 32.35% over the last week.

3. Vanguard Health Systems Inc. (VHS): Engages in the ownership and operation of acute care hospitals, outpatient facilities, and related health plans primarily in urban and suburban markets in the United States. Market cap of $675.29M. Of the 11 analysts that have set a target price on the stock, the lowest price target stands at $12.00. This implies a current upside of 34.08% from current levels around $8.95. It's been a rough couple of days for the stock, losing 14.85% over the last week.

4. Nektar Therapeutics (NKTR): Engages in developing a pipeline of drug candidates that utilize its PEGylation and polymer conjugate technology platforms. Market cap of $542.35M. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $6.00. This implies a current upside of 28.21% from current levels around $4.68. The stock is a short squeeze candidate, with a short float at 13.46% (equivalent to 11.17 days of average volume). It's been a rough couple of days for the stock, losing 15.66% over the last week.

5. MAP Pharmaceuticals, Inc. (MAPP): Focuses on the development and commercialization of inhalation therapies for patients suffering from migraine. Market cap of $418.58M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $18.00. This implies a current upside of 27.75% from current levels around $14.09. This is a risky stock that is significantly more volatile than the overall market (beta = 2.72). The stock is a short squeeze candidate, with a short float at 6.62% (equivalent to 13.46 days of average volume). It's been a rough couple of days for the stock, losing 12.52% over the last week.

6. Inhibitex, Inc. (INHX): Focuses on the development of differentiated anti-infective products to prevent or treat serious infections, primarily shingles and chronic infections caused by hepatitis C virus (HCV). Market cap of $667.74M. Of the 9 analysts that have set a target price on the stock, the lowest price target stands at $5.00. This implies a current upside of 26.26% from current levels around $3.96. The stock has had a couple of great days, gaining 121.24% over the last week.

7. Hanger Orthopedic Group Inc. (HGR): Engages in the ownership and operation of orthotic and prosthetic (O&P) patient-care centers in the United States. Market cap of $577.38M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $22.00. This implies a current upside of 25.93% from current levels around $17.47. The stock is a short squeeze candidate, with a short float at 5.91% (equivalent to 6.43 days of average volume). The stock is currently stuck in a downtrend, trading 12.28% below its SMA20, 8.55% below its SMA50, and 25.44% below its SMA200. The stock has lost 8.88% over the last year.

8. WuXi PharmaTech (Cayman) Inc. (WX): Engages in providing laboratory and manufacturing services to support research and development for pharmaceutical, biotechnology, and medical device companies. Market cap of $886.50M. Of the 10 analysts that have set a target price on the stock, the lowest price target stands at $15.80. This implies a current upside of 24.90% from current levels around $12.65. It's been a rough couple of days for the stock, losing 8.74% over the last week.

9. ZIOPHARM Oncology, Inc. (ZIOP): Focuses on the development and commercialization of in-licensed cancer drugs in North America. Market cap of $320.11M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $6.00. This implies a current upside of 23.46% from current levels around $4.86. The stock is a short squeeze candidate, with a short float at 12.93% (equivalent to 13.18 days of average volume). It's been a rough couple of days for the stock, losing 9.13% over the last week. The stock has had a good month, gaining 10.38%.

10. ZOLL Medical Corp. (ZOLL): Develops, manufactures, and markets resuscitation devices and related software solutions worldwide. Market cap of $778.22M. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $44.00. This implies a current upside of 23.04% from current levels around $35.76. The stock is currently stuck in a downtrend, trading 5.15% below its SMA20, 8.75% below its SMA50, and 26.35% below its SMA200. It's been a rough couple of days for the stock, losing 8.58% over the last week.

11. Covidien plc (COV): Develops, manufactures, and sells healthcare products for use in clinical and home settings in the United States and internationally. Market cap of $22.51B. Of the 20 analysts that have set a target price on the stock, the lowest price target stands at $56.00. This implies a current upside of 22.48% from current levels around $45.72. It's been a rough couple of days for the stock, losing 5.47% over the last week.

12. Avanir Pharmaceuticals (AVNR): Engages on acquiring, developing, and commercializing novel therapeutic products for the treatment of central nervous system disorders primarily in the United States. Market cap of $348.97M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $3.50. This implies a current upside of 22.38% from current levels around $2.86. This is a risky stock that is significantly more volatile than the overall market (beta = 2.29). The stock is a short squeeze candidate, with a short float at 26.12% (equivalent to 16.37 days of average volume). It's been a rough couple of days for the stock, losing 6.95% over the last week.

13. Xenoport, Inc. (XNPT): Focuses on developing and commercializing internally discovered product candidates that utilize the body's natural nutrient transport mechanisms to enhance the therapeutic benefits of drugs. Market cap of $203.78M. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $7.00. This implies a current upside of 22.16% from current levels around $5.73. The stock is a short squeeze candidate, with a short float at 9.8% (equivalent to 9.28 days of average volume). It's been a rough couple of days for the stock, losing 8.59% over the last week.

14. XOMA Ltd. (XOMA): Engages in the discovery, development, and manufacture of therapeutic antibodies to treat inflammatory, autoimmune, infectious, and oncological diseases. Market cap of $54.36M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $2.00. This implies a current upside of 21.95% from current levels around $1.64. The stock has lost 36.5% over the last year.

15. Ariad Pharmaceuticals Inc. (ARIA): Focuses on the discovery, development, and commercialization of small-molecule drugs for the treatment of cancer. Market cap of $1.59B. Of the 10 analysts that have set a target price on the stock, the lowest price target stands at $14.00. This implies a current upside of 21.53% from current levels around $11.52. Exhibiting strong upside momentum--currently trading 11.8% above its SMA20, 19.29% above its SMA50, and 34.52% above its SMA200. The stock has had a good month, gaining 28.45%.

16. Integra LifeSciences Holdings Corporation (IART): Develops, manufactures, and markets surgical implants and medical instruments for neurosurgery, extremity reconstruction, orthopedics, and general surgery. Market cap of $813.49M. Of the 14 analysts that have set a target price on the stock, the lowest price target stands at $35.00. This implies a current upside of 21.28% from current levels around $28.86. The stock is a short squeeze candidate, with a short float at 7.87% (equivalent to 5.79 days of average volume). It's been a rough couple of days for the stock, losing 22.92% over the last week.

17. The Spectranetics Corporation (SPNC): Designs, manufactures, and markets single use medical devices used in minimally invasive surgical procedures within the cardiovascular system in conjunction with its proprietary excimer laser system, the CVX-300. Market cap of $247.89M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $9.00. This implies a current upside of 19.84% from current levels around $7.51. The stock is a short squeeze candidate, with a short float at 5.13% (equivalent to 9.66 days of average volume). It's been a rough couple of days for the stock, losing 7.75% over the last week.

18. HEALTHSOUTH Corp. (HLS): Offers inpatient rehabilitative healthcare services in the United States and Puerto Rico. Market cap of $1.71B. Of the 16 analysts that have set a target price on the stock, the lowest price target stands at $22.00. This implies a current upside of 19.37% from current levels around $18.43. The stock has had a good month, gaining 20.27%.

*Target price data sourced from Thomson/First Call (via Yahoo! Finance), all other data sourced from Finviz.

Source: 18 Healthcare Stocks Undervalued By Target Price