Last year at this time, I made a screen of some stocks from the healthcare sector with an interesting market valuation, a great past growth performance as well as good earnings situation. Such stocks had a forward price to earnings ratio of less than 15, a sales growth over the past five years of more than 10 percent as well as an operating margin above 10 percent. Exactly seven stocks fulfilled these criteria. Now, I review these picks and try to discover a new list of potential stocks for next year, 2013. Over the recent year the Dow is up 8.36 percent, the S&P 500 gained 13.82 percent and the NASDAQ is 14.58 percent higher. My seven healthcare picks performed in average 31.55 percent while the healthcare sector gained 25.7 percent. Below is a current screen of the seven picks.
Now I try to make a similar screen with attractive price ratios. The only new restrictions are simple. I allow lower capitalized stocks (over USD 2 billion market capitalization) and introduce a new barrier in terms of earnings growth. I want mid-term (next five years) earnings per share growth of more than 5 percent. Thirteen companies remain.
Here is the full table with some fundamentals:
Take a closer look at the full list. The average P/E ratio amounts to 19.60 and forward P/E ratio is 16.84. The dividend yield has a value of 2.75 percent. Price to book ratio is 3.46 and price to sales ratio 2.06. The operating margin amounts to 15.16 percent. The average stock has a debt to equity ratio of 0.92.
Related stock ticker symbols:
ABT, STJ, HLF, TEVA, SYK, TMO, UHS, LIFE, MD, CELG, JAZZ, UTHR, SLXP