6 Rallying Healthcare Stocks With Strong Receivable Trends

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Includes: BMRN, ERT, EW, RDSMY, TECH, YDNT
by: Kapitall

Do you consider a company's sales trends when evaluating stocks? Because many companies earn a majority of their profits through revenue, a sales analysis is an important part of almost any company's story. To illustrate, we ran a screen.

We began by screening the healthcare sector for stocks with strong upward momentum, trading above their 20-day, 50-day, and 200-day moving averages.

We then screened for those stocks with strong sales trends, comparing growth in revenue to growth in accounts receivable over the last year. Since accounts receivable is the portion of revenue not yet received, and there is no guarantee the money will ever be received, the smaller the portion of revenue made up of receivables the healthier the company's revenue.

We screened for stocks seeing faster growth in revenue than accounts receivable year-over-year, as well as accounts receivable comprising a smaller portion of current assets over the same time period.

Do you think these stocks have strong sales trends? Use this list as a starting point for your own analysis.

List sorted by growth in revenue over the last year.

1. eResearchTechnology, Inc. (NASDAQ:ERT): Provides technological services and medical devices in North America and the United Kingdom. Market cap at $390.18M, most recent closing price at $7.90. The stock is currently trading 0.02% above its 20-day moving average, 1.35% above its 50-day MA, and 37.28% above its 200-day MA. Revenue grew by 21.13% during the most recent quarter ($50.51M vs. $41.7M y/y). Accounts receivable grew by 1.26% during the same time period ($37.65M vs. $37.18M y/y). Receivables, as a percentage of current assets, decreased from 43.07% to 36.22% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

2. Kensey Nash Corporation (KNSY): Engages in the field of regenerative medicine utilizing its proprietary collagen and synthetic polymer technology to help repair damaged or diseased tissues. Market cap at $334.69M, most recent closing price at $38.47. The stock is currently trading 6.90% above its 20-day moving average, 22.75% above its 50-day MA, and 48.70% above its 200-day MA. Revenue grew by 19.2% during the most recent quarter ($22.16M vs. $18.59M y/y). Accounts receivable grew by 2.66% during the same time period ($10.81M vs. $10.53M y/y). Receivables, as a percentage of current assets, decreased from 18.54% to 15.41% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

3. Edwards Lifesciences Corp. (NYSE:EW): Offers products and technologies designed to treat advanced cardiovascular disease worldwide. Market cap at $9.75B, most recent closing price at $85.05. The stock is currently trading 3.58% above its 20-day moving average, 13.15% above its 50-day MA, and 19.24% above its 200-day MA. Revenue grew by 13.52% during the most recent quarter ($459.2M vs. $404.5M y/y). Accounts receivable grew by -2.12% during the same time period ($346.7M vs. $354.2M y/y). Receivables, as a percentage of current assets, decreased from 30.79% to 29.18% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

4. Techne Corp. (NASDAQ:TECH): And its subsidiaries engage in the development, manufacture, and sale of biotechnology products, and hematology calibrators and controls primarily in the United States and Europe. Market cap at $2.54B, most recent closing price at $68.89. The stock is currently trading 0.70% above its 20-day moving average, 0.82% above its 50-day MA, and 0.48% above its 200-day MA. Revenue grew by 9.64% during the most recent quarter ($83.62M vs. $76.27M y/y). Accounts receivable grew by 4.27% during the same time period ($39.11M vs. $37.51M y/y). Receivables, as a percentage of current assets, decreased from 13.55% to 12.77% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

5. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN): Develops and commercializes biopharmaceuticals for serious diseases and medical conditions. Market cap at $4.4B, most recent closing price at $38.04. The stock is currently trading 3.17% above its 20-day moving average, 8.29% above its 50-day MA, and 13.78% above its 200-day MA. Revenue grew by 6.57% during the most recent quarter ($116.65M vs. $109.46M y/y). Accounts receivable grew by 1.58% during the same time period ($112.66M vs. $110.91M y/y). Receivables, as a percentage of current assets, decreased from 22.01% to 21.94% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

6. Young Innovations Inc. (NASDAQ:YDNT): Engages in the development, manufacture, and marketing of supplies and equipment used by dentists, dental hygienists, dental assistants, and consumers primarily in the United States, as well as in Canada, Europe, South America, Central America, and the Pacific Rim. Market cap at $273.53M, most recent closing price at $34.80. The stock is currently trading 4.39% above its 20-day moving average, 8.65% above its 50-day MA, and 18.62% above its 200-day MA. Revenue grew by 2.81% during the most recent quarter ($26.75M vs. $26.02M y/y). Accounts receivable grew by -7.2% during the same time period ($11.98M vs. $12.91M y/y). Receivables, as a percentage of current assets, decreased from 35.54% to 30.67% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

*Accounting data sourced from Google 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.