With the aging baby-boomer generation, investing in healthcare is a no brainer. If you plan on investing for the long term, one key attribute to look for in a healthcare company is a strong cash reserve. Having plenty of cash on hand is crucial for healthcare companies to continually innovate through R & D, and possibly make huge breakthroughs in health. Today we focused on healthcare companies that not only have plenty of cash, but that have also received ratings of 'Strong Buy' by industry analysts. We think you'll find this list rather interesting.
The Current ratio is a liquidity ratio used to determine a company's financial health. The metric illustrates how easily a firm can pay back its short obligations all at once through current assets. A company that has a current ratio of one or less is generally a liquidity red flag. Now this doesn't mean the company will go bankrupt tomorrow, but it also doesn't bode well for the company, and may indicate that it could have an issue paying back upcoming obligations.
The Quick ratio measures a company's ability to use its cash or assets to extinguish its current liabilities immediately. Quick assets include assets that presumably can be converted to cash at close to their book values. A company with a Quick Ratio of less than 1 cannot currently pay back its current liabilities. The quick ratio is more conservative than the Current Ratio because it excludes inventory from current assets, since some companies have difficulty turning their inventory into cash. If short-term obligations need to be paid off immediately, sometimes the current ratio would overestimate a company's short-term financial strength. In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets).
We first looked for healthcare stocks. From here, we then looked for companies that analysts rate as "Strong Buy" (mean recommendation < 2). We then screened for businesses that have strong liquidity (Current Ratio>2)(Quick Ratio>2). We did not screen out any market caps.
Do you think these stocks will offer healthy returns? Use our list to help with your own analysis.
1) China Biologic Products, Inc. (CBPO)
China Biologic Products, Inc. has a Analysts' Rating of 1.00, a Current Ratio of 3.50, and a Quick Ratio of 2.18. The short interest was 0.52% as of 06/19/2012. China Biologic Products, Inc., a biopharmaceutical company, through its subsidiaries, engages in the research, development, manufacture, and sale of human plasma-based biopharmaceutical products to hospitals and inoculation centers in the People's Republic of China. It offers Human Albumin for the treatment of shock caused by blood loss trauma or burn; raised intracranial pressure caused by hydrocephalus or trauma; oedema or ascites caused by hepatocirrhosis and nephropathy; and neonatal hyperbilirubinemia, as well as for the prevention and treatment of low-density-lipoproteinemia. The company also offers Human Hepatitis B Immunoglobulin for the prevention of measles and contagious hepatitis; Human Immunoglobulin and Human Immunoglobulin for Intravenous Injection products for original immunoglobulin deficiency, secondary immunoglobulin deficiency, and auto-immune deficiency diseases; and Thymopolypeptides Injection that is used in the treatment of various original and secondary T-cell deficiency syndromes, auto-immune deficiency diseases, and a range of cell immunity deficiency diseases, as well as assists in the treatment for tumors.
2) China Cord Blood Corporation (CO)
|Industry:||Medical Laboratories & Research|
China Cord Blood Corporation has a Analysts' Rating of 1.00, a Current Ratio of 4.55, and a Quick Ratio of 4.52. The short interest was 0.35% as of 06/19/2012. China Cord Blood Corporation, together with its subsidiaries, engages in the provision of umbilical cord blood storage and ancillary services in its cord blood banks in the People's Republic of China. It offers cord blood testing, processing, and storage services under the direction of subscribers; and tests, processes, and stores donated cord blood, and provides matching services. As of March 31, 2011, it had 2 operating cord blood banks in the Beijing municipality and the Guangdong province.
3) AtriCure, Inc. (ATRC)
|Industry:||Medical Instruments & Supplies|
AtriCure, Inc. has a Analysts' Rating of 1.50, a Current Ratio of 2.80, and a Quick Ratio of 2.21. The short interest was 3.79% as of 06/19/2012. AtriCure, Inc., a medical device company, engages in developing, manufacturing, and selling cardiac surgical ablation systems designed to create precise lesions or scars in cardiac tissue in the United States and internationally. Its product lines for cardiac tissue ablation includes AtriCure's synergy ablation system and related radio-frequency ablation devices, such as isolator bipolar radio-frequency ablation clamps for open-heart and minimally invasive procedures; ablation and sensing units, a compact power generator that delivers bipolar radio-frequency (RF) energy; AtriCure switch box to provide the technology needed for the dual pulsing electrodes, and to connect and toggle between multiple RF devices; and isolator multifunctional pens that are disposable RF devices enabling surgeons to toggle back and forth between temporary pacing, sensing, and stimulation and ablation. The company also offers cryoablation system, which consists of various reusable and disposable devices, including the Frigitronics CCS-200 product line for cardiac ablation; cryoIce, a disposable cryoablation device; and cryoICE BOX, a cryo generator, as well as AtriClip system, which is designed to exclude the left atrial appendage by implanting the device during concomitant open surgical procedures from the outside of the heart.
4) BG Medicine, Inc. (BGMD)
|Industry:||Medical Laboratories & Research|
BG Medicine, Inc. has a Analysts' Rating of 1.30, a Current Ratio of 7.97, and a Quick Ratio of 7.96. The short interest was 2.29% as of 06/19/2012. BG Medicine, Inc., a life sciences company, engages in the discovery, development, and commercialization of novel cardiovascular diagnostics to address unmet medical needs. The company markets the BGM Galectin-3, a diagnostic test for measuring galectin-3 levels in blood plasma or serum for use in patients with heart failure through regional and national laboratory testing facilities and directly to hospitals and clinics in the United States, as well as through distributors in certain countries in Europe. It is also developing CardioSCORE, a cardiovascular diagnostic test designed to identify individuals at high risk for near term cardiovascular events, such as heart attack and stroke; and galectin-3 test for a second indication to identify individuals at risk for developing heart failure, such as patients who have suffered a heart attack, as well as patients suffering from hypertension or diabetes.
5) BioTime, Inc. (BTX)
BioTime, Inc. has a Analysts' Rating of 1.00, a Current Ratio of 9.49, and a Quick Ratio of 9.46. The short interest was 16.14% as of 06/19/2012. BioTime, Inc., a biotechnology company, focuses on regenerative medicine and blood plasma volume expanders. It primarily focuses on regenerative medicine, which refers to therapies based on human embryonic stem (HES) cell and induced pluripotent stem (IPS) cell technology designed to rebuild cell and tissue function lost due to degenerative disease or injury. The company develops and markets research products in the field of stem cells and regenerative medicine.
6) Antares Pharma Inc. (AIS)
|Industry:||Medical Instruments & Supplies|
Antares Pharma Inc. has a Analysts' Rating of 1.50, a Current Ratio of 4.44, and a Quick Ratio of 4.27. The short interest was 11.91% as of 06/19/2012. Antares Pharma Inc., a pharmaceutical company, engages in the development and marketing of self-injection pharmaceutical products and technologies, and topical gel-based products. It offers Vision/Tjet reusable needle-free injectors that deliver precise medication doses through high-speed pressurized liquid penetration of the skin without a needle; Vibex disposable pressure assisted auto injector devices that are used for the controlled pressure delivery of drugs into the body utilizing a spring power source; disposable pen injection systems, which are needle-based devices designed to deliver multiple drugs by injection through needles from multi-dose drug cartridges; and Advanced Transdermal Delivery (ATD) Gel System that penetrates the skin to deliver treatments. The company also provides Anturo, an oxybutynin gel product for the treatment of OAB; Elestrin, a transdermal estradiol gel for the treatment of moderate-to-severe vasomotor symptoms associated with menopause; and Nestragel, a contraceptive formulation product.
7) Anika Therapeutics Inc. (ANIK)
Anika Therapeutics Inc. has a Analysts' Rating of 1.00, a Current Ratio of 4.97, and a Quick Ratio of 4.26. The short interest was 2.15% as of 06/19/2012. Anika Therapeutics, Inc., together with its subsidiaries, develops, manufactures, and commercializes therapeutic products for tissue protection, healing, and repair. Its products are based on hyaluronic acid (HA), a naturally occurring biocompatible polymer found in the body. The company offers orthobiologics products for providing relief from the pain of osteoarthritis, and regenerating damaged tissue, such as cartilage defects; ORTHOVISC for the treatment of osteoarthritis of the knee and various joints; ORTHOVISC mini for the treatment of osteoarthritis in small joints; and MONOVISC, a single injection product used for the treatment of osteoarthritis in various joints.
*Company profiles were sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.