The healthcare sector has been the top performing group during the last six months, with a 8.7% gain during that period.
Based on this observation I screened for companies in the healthcare sector where at least one insider made a buy transaction during the November month. I wrote the part I of an article titled "5 Healthcare Companies With Insider Buying During November 2012" on November 5. Here is a look at five additional stocks that I found.
1. STAAR Surgical Company (STAA) which has been dedicated solely to ophthalmic surgery for over 25 years, designs, develops, manufactures and markets implantable lenses for the eye. All of these lenses are foldable, which permits the surgeon to insert them through a small incision. STAAR's lens used in refractive surgery as an alternative to LASIK is called an Implantable Collamer Lens [ICL]. A lens used to replace the natural lens after cataract surgery is called an intraocular lens [IOL]. Over 300,000 Visian ICLs have been implanted to date.
- Broadwood Partners purchased 22,572 shares on November 2, and 296,718 shares on July 31-August 2. Broadwood Partners currently holds 6,399,021 shares of the company. STAAR Surgical has 36,604,844 shares outstanding which makes Broadwood Partners a 17.5% owner of STAAR Surgical.
- Barry Caldwell purchased 5,000 shares on August 9, and 5,000 shares on May 29. Barry Caldwell currently holds 246,839 shares of the company. Mr. Caldwell has served as STAAR Surgical's President and Chief Executive Officer since November 2007, after joining STAAR Surgical's Board of Directors in May, 2007.
- Mark Logan purchased 2,000 shares on May 31, and currently holds 15,000 shares of the company. Mark Logan was appointed to the company's Board of Directors on November 17, 2010.
The company reported the third-quarter financial results on October 31 with the following highlights:
|Net loss||$0.1 million|
Below is an update on the company's progress against the second half key metrics:
Increase in revenues of solid double digit growth.
- The company expects its year-over-year fourth-quarter growth to exceed its third-quarter growth rate. However, a solid double digit growth for the second half would be beyond the company's current forecast.
Increase in Visian ICL revenues of 25%.
- The company is expecting strong Visian ICL revenue growth during the fourth quarter. However, without a solid rebound in Asia Pacific markets a 25% growth rate for the second half would be beyond the company's current estimates.
Continuous expansion of gross margins to achieve 71% for the full year.
- With the 190 basis point improvement during the third quarter and estimates for the fourth quarter the company should achieve this metric for the full year.
Achieve profitability in Q3 and Q4.
- Though the company was breakeven during the third quarter on a GAAP per share basis, the company's estimates for the fourth quarter would result in profitability for the second half and the full year.
Implement manufacturing consolidation with no disruption to customer quality or supply requirements. This metric will be measured by the amount of customer backorders.
- This continues to be favorable and the company expects it to remain so during the fourth quarter as well.
- Since some expenses were pulled forward from 2013 the spending level was higher than projected for the third quarter and will be so for the full year.
The stock is currently trading close to its 52 -week lows. There have been five insider buy transactions and nine insider sell transactions this year. The stock is trading at a forward P/E ratio of 39.07. The company has a book value of $0.89 per share. I have a neutral bias for the stock currently.
2. Ironwood (IRWD) is an entrepreneurial pharmaceutical company that discovers, develops, and intends to commercialize innovative human medicines targeting important therapeutic needs. The company's goal is to build the next great pharmaceutical company-an outstanding business that will thrive and endure well beyond our lifetimes and generate substantial returns for shareholders.
Peter Hecht purchased 50,000 shares on November 5, and currently holds 3,722,554 shares of the company. Peter Hecht has served as the company's chief executive officer since the company's founding in 1998.
The company reported the third-quarter financial results on November 6, with the following highlights:
|Net income||$47.6 million|
Ironwood received an $85 million milestone payment from Forest Laboratories (FRX) for FDA approval of Linzess.
Ironwood announced on September 21, that the European Committee for Medicinal Products for Human Use [CHMP] has issued a positive opinion recommending the marketing approval for Constella (linaclotide 290 micrograms), for the symptomatic treatment of moderate to severe irritable bowel syndrome with constipation (IBS‐C) in adults.
The CHMP positive opinion is a recommendation to the European Commission [EC] and one of the final steps in the review of a marketing authorization application. The EC usually follows the recommendations of the CHMP. Once approved, it will be marketed under the brand name Constella.
The company expects a decision from the European Commission in 2012 according to the conference call dated October 16.
The stock has a $8.5 price target from the Point and Figure chart. There has been one insider buy transaction and there have been 17 insider sell transactions this year. I believe the next catalyst for the stock will be the European Commission's decision regarding Constella due later this year. I have a neutral bias for the stock currently.
3. Questcor Pharmaceuticals (QCOR) is a biopharmaceutical company focused on the treatment of patients with serious, difficult-to-treat autoimmune and inflammatory disorders. Questcor's primary product is H.P. Acthar Gel (repository corticotropin injection), an injectable drug that is approved by the FDA for the treatment of 19 indications. Of these 19 indications, Questcor currently generates substantially all of its net sales from the following indications: the treatment of proteinuria in idiopathic types of nephrotic syndrome, the treatment of acute exacerbations of multiple sclerosis in adults, the treatment of infantile spasms in children under two years of age, and the treatment of certain rheumatology-related conditions. Questcor is also exploring the possibility of developing markets for other on-label indications and the possibility of pursuing FDA approval of additional indications not currently on the Acthar label where there is high unmet medical need.
- David Madeiros purchased 55,000 shares on November 2-5, and currently holds 63,028 shares of the company. David Madeiros is Executive Vice President and Chief Technical Officer of the company.
- Stephen Cartt purchased 10,000 shares on November 2, and currently holds 88,198 shares of the company. Stephen Cartt is Chief Operating Officer of the company.
- Michael Mulroy purchased 1,000 shares on May 23, and currently holds 2,117 shares of the company. Michael Mulroy is Senior Vice President, Chief Financial Officer, General Counsel and Corporate Secretary.
The company reported the third-quarter financial results on October 23, with the following highlights:
|Net income||$55.7 million|
The stock has a $46.5 price target from the Point and Figure chart. There have been three insider buy transactions and 15 insider sell transactions this year. The stock is trading at a P/E ratio of 9.56 and a forward P/E ratio of 6.15. There are seven buy ratings, six neutral ratings and 0 sell ratings from analysts with a average price target of $41.89. I have a cautiously bullish bias for the stock currently.
4. UnitedHealth Group (UNH) is a diversified health and well-being company dedicated to helping people live healthier lives and making health care work better. With headquarters in Minnetonka, Minn., UnitedHealth Group offers a broad spectrum of products and services through two distinct platforms: UnitedHealthcare, which provides health care coverage and benefits services; and Optum, which provides information and technology-enabled health services. Through its businesses, UnitedHealth Group serves more than 75 million people worldwide.
Edson Bueno purchased 8,416,905 shares on November 2. Edson Bueno serves as a director of the company.
The company reported the third-quarter financial results on October 16, with the following highlights:
|Net income||$1.56 billion|
The company increased its outlook for 2012 net earnings to a range of $5.20 to $5.25 per share and cash flows from operations to approximately $7 billion, based on the nine-month results and expectations for fourth quarter performance.
The stock has a $41 price target from the Point and Figure chart. There has been one insider buy transaction and there have been nine insider sell transactions since March 2012. The stock is trading at a P/E ratio of 10.74 and a forward P/E ratio of 10.07. The company has a book value of $29.86 per share and a cash position of $8.73 per share. The stock has a dividend yield of 1.51%. There are 10 analyst buy ratings, four neutral ratings and 0 sell ratings with a $66.5 average price target. I have a neutral bias for the stock currently.
5. NovaBay Pharmaceuticals (NBY) is a biotechnology company focused on addressing the large unmet therapeutic needs of the global anti-infective market with its two distinct categories of compounds, Aganocides and NeutroPhase Skin and Wound Cleanser.
The company's four core business units, DermaBay, UroBay, EyeBay and MediBay, are developing treatments that tackle infections in the dermatology, urology, ophthalmology, and wound care areas.
- Pioneer Pharma Singapore purchased 1,200,000 shares on October 31, pursuant to a private placement. On Novemeber 5, NovaBay announced the receipt of a $1.5M equity investment from Pioneer Pharma Singapore, an affiliate of Naqu Area Pioneer Pharma, a Shanghai-based company that markets high-end pharmaceutical products into China. As part of the expansion of the NeutroPhase distribution agreement for Southeast Asia announced on September 14, Pioneer has completed its investment of $2.5M. Pioneer has the right to invest an additional $3.0M on or before Aug. 31, 2013.
- Thomas Paulson purchased 10,000 shares on May 30, and currently holds 57,500 shares of the company. Thomas Paulson has served as NovaBay's Chief Financial Officer since January 2008.
- Ramin Najafi purchased 6,000 shares on May 29, and 3,500 shares on May 25. Ramin Najafi currently controls 3,152,252 shares of the company. Ramin Najafi is the founder and Chairman of NovaBay. He has served as President since July 2002, and as Chief Executive Officer since November 2004.
The company reported the third-quarter financial results on November 1 with the following highlights:
|Net income||$0.1 million|
Dr. Ron Najafi, Chairman and CEO, commented on November 1:
"Thanks in large part to the groundwork we have been laying over the past few years, we are now involved in three ongoing Phase 2b trials studying our lead Aganocide® compound, NVC-422. We are pleased with the progress in being made in each of our areas of focus for NVC-422: dermatology, ophthalmology, and urology. Results are anticipated for each of these programs in 2013. Further, the additional FDA 510(k) clearance for our wound care product, NeutroPhase®, gives surgeons greater flexibility in the management of graft and donor-site surgical procedures."
The stock is currently trading right at its 200-day moving average. There have been four insider buy transactions and there have not been any insider sell transactions this year. The company is going to present results from three different phase 2b trials during 2013. I have a neutral bias for the stock currently.