It is a popular myth in the market that healthcare stocks tend to be a safer investment. This is because this sector is able to survive even the worst economic conditions. It is widely thought that healthcare stocks are more stable in nature and offer better returns. This, however, is not always true. Investing in healthcare stocks requires significant knowledge and insight into the market and its trends. Decisions have to be calculated and well planned in order to gain better returns and growth opportunities. It is also a fact that some healthcare stocks get overlooked by investors and analysts. The five overlooked healthcare stocks I will explore here are as follows:
Momenta Pharmaceuticals Inc (MNTA): The current market price for this stock is close to $15 per share. It is being predicted that this will remain unchanged for a while. Market capitalization at the current price is close to $791 million and the 52-week trading range is between $10 and $21 per share approximately. Earnings per share (EPS) are nearly $4 and a price-to-earnings ratio is more than 4 as well. Beta for this stock has been calculated to be 1.44, which makes it a bit risky. This stock has been given a low rating by industry analysts and experts. A positive trend has been seen in terms of income growth, and its profit margins are significantly higher than most of its competitors. In January it was reported that this is one of the stocks in the healthcare sector that have been undervalued by the trends in EPS. It is ranked among the top five small-cap pharmaceutical stocks currently. In my opinion, this stock has been under-rated and would be a good option to buy for investors looking into the healthcare stocks.
Exilixis Inc (EXEL): The current trading price in the market for this stock is $6 per share, approximately. Some experts are predicting that the price will remain unchanged. At this price, the market capitalization is close to $872 million and the 52-week trading range is currently between $4 and $13 per share. Earnings per share are nearly $1 and the price-to-earnings (P/E) ratio is 10. In the current market scenario, this stock has a beta of 2 and is rated far below the other healthcare stock options. This stock has been showing high growth potential with a high profit margin as well. In the first month of this quarter it was reported that this stock was one of the five options that could double themselves. The stock had been facing some difficulty in the past but had started to recover. The latest reports on the current market trends suggest that this is one of the five most promising stock options but is a bit risky. I believe that this could be a good stock to invest in once its position becomes more stable and consistent.
Neurocrine Biosciences Inc (NBIX): The current trading price of this stock in the market is approximately $9 per share. There is a high probability that this might remain unchanged for some time. At its current price, the company's market capitalization is close to $571 million and the 52-week trading range is between $5 and $10 per share as an approximate figure. Earnings per share are nearly $1 and the price-to-earnings (P/E) ratio is 13. This stock is a much safer investment and has a beta of 0.32. Income growth is showing positive trends and the profit margins are growing too. Neurocrine Biosciences has been given a rating of 7 out of 10 by industry experts because of low risk and high growth potential. It has been categorized as one of the healthcare stocks which are in the spotlight for investors. There had been some problems being faced in the earlier quarters of the previous year. However, by the last quarter, the situation had improved and the stock has been able to stabilize itself. In my opinion, this is a safer option to invest in right now.
Thoratec Corp (THOR): the current trading price for this stock in the market is close to $35 per share. It seems as if the price will remain unchanged for some time. At its current price, the company's market capitalization is above $2 billion and the average trading volume is more than 800,000. The 52-week trading range for the stock is between $24 and $38 per share, approximately. Earnings per share are more than $1 and the price-to-earnings (P/E) ratio is close to 23. The beta for this stock is 0.78, which means that it is a safer option than most. With a positive growth in sales and income, the company has a profit margin of approximately 17%. It has been given a rating of 8 out of 10 by industry experts based on its lower risk and better performance. It has recently been reported that this stock has the potential to outperform most of its competitors. Rodman & Renshaw has revised its price targets for Thoratec from $40 to $42 and has rated it as a market outperformer. I believe that this would be a good option to invest in for growth and income.
Syneron Medical Ltd (ELOS): The stock is currently trading in the market at an approximate price of $12 per share. Some experts predict that the price will remain unchanged for a while, but others feel that they might rise. Market capitalization at the current price is close to $383 million and the average trading volume is more than 124,000. The 52-week trading range is between $9 and $15 per share. Price-to-earnings (P/E) ratio is close to 165. Beta for this stock is calculated to be 1.49, which means that it could be a bit risky to invest in this stock. The income growth and profit margins are shrinking. However, shares of the company have been doing quite well in the market recently. Prices have increased too during this quarter which depicts a brighter picture. I believe that it would be a viable option to invest in this stock as it is safer than most and can be useful in building a diversified portfolio.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.