Looking for Healthcare Stocks? Consider These Four By The Street
Shares of Cynosure (NASDAQ:CYNO) are up 20% thus far in 2016, but the cosmetic treatment maker's chart could look even prettier by year end, said David Swank, portfolio manager for the Hood River Small-Cap Growth Fund (MUTF:HRSMX) .
"Their new fat reduction product should drive better than expected growth," said Swank. "Plus it is still cheap even after the stock's tremendous run-up this year due to its growth rate and margin expansion."
Last week the Westford, Mass.-based company said it had adjusted earnings of 35 cents per share, topping Wall Street expectations by six cents. Cynosure posted revenue of $110.3 million in the period, also exceeding Street forecasts.
The Hood River Small-Cap Growth Fund is up 3.9% thus far in 2016, according to Morningstar. The $143 million fund has returned an average of 8.9% annually over the past three years, outpacing 86% percent of its rivals in Morningstar's small-cap growth category.
Swank is also bullish on PRA Health Sciences (NASDAQ:PRAH) , up 4% year to date, saying the clinical trial provider is getting a "tailwind from full biotech coffers." PRA Health also saw its shares surge last week after it reported adjusted earnings of 63 cents per share, four cents better than analysts' expected. The contract research organization posted revenue of $455.8 million in the period, also beating Street forecasts.
NuVasive (NASDAQ:NUVA) is another one of Swank's top picks. The medical device maker, up 15% year to date, also topped Wall Street forecasts on the top and bottom lines last week. The San Diego-based company posted adjusted earnings of 40 cents per share, beating the consensus estimate of 36 cents.
"NuVasive's spinal surgery system is quicker and safer than traditional lumbar fusion surgery," said Swank. "That should drive double-digit top-line growth."
Finally, Swank is a fan of Integra Life Sciences (NASDAQ:IART) , up 25% so far in 2016, saying it should benefit from a "mix shift into higher margin products like orthopedics." Last week the surgical implant-seller reported second quarter adjusted earnings of 79 cents per share, surpassing Wall Street expectations by three cents. Integra's revenue of $249.3 million in the period, also beat Street forecasts.