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3 Beaten-Down Medical Product Stocks to Buy on a Turnaround in 2022
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As 2021 comes to an end where relentless efforts were made to contain the pandemic, infections are resurfacing due to the latest omicron variant. This latest strain, which is suspected to be more contagious and deadly, again reminds investors of the period of widespread lockdowns and economic doldrums.
However, the Biden administration is not yet mulling further lockdown measures or stricter restrictions. This is expected to keep investors’ sentiments upbeat ahead of the new year.
With investors’ sentiment currently buoyant and no indication of another economic standstill, the MedTech sector of the broader U.S. economy is expected to keep pace with the ongoing demand and ramp up their production scales.
Although economic uncertainty prevails due to the surging omicron cases and prevailing delta variant, it would be prudent for investors to focus on those fundamentally-sound stocks that are currently trading below their actual potential. Considering this, Quidel Corporation (QDEL - Free Report) , Cerus Corporation (CERS - Free Report) and NextGen Healthcare, Inc. seem like the right picks.
Medical Products: A Snapshot
Although the overall MedTech sector is expected to perform well despite the dominant omicron strain resulting in a surge of cases, investors should direct their attention to the Medical Products space. This space includes some of those companies that have been actively fighting the pandemic as well as non-COVID-19 companies. For instance, renowned global provider of life science reagents and services, Maravai LifeSciences Holdings, Inc. (MRVI - Free Report) , reported solid segmental revenues in its third-quarter 2021 results in October. Robust overall top line and Nucleic Acid Production segment’s performances of MRVI were driven by continued strong demand for the company’s proprietary CleanCap analogs owing to COVID-19 vaccine manufacturers scaling up their production as well as increased demand for mRNA products. Maravai LifeSciences currently projects 1.9% earnings growth for 2022.
The non-COVID-19 companies, which suffered severe setbacks amid the pandemic, are gradually on the rebound due to the healthcare system and hospitals’ refocus on non-COVID patients. With no imminent indications of another economic shutdown, these companies are expected to witness continued growth recovery.
Owing to the pandemic-led uncertainty, prices of various fundamentally-sound stocks are yet to outperform the market and are currently selling at a discount. Investing in such stocks would be wise for investors keen on reaping long-term benefits. It is to be noted, during the pre-pandemic time, most of such stocks were expensive to buy based on their otherwise robust long-term growth parameters.
3 Stocks to Buy
Given that fundamentally-strong stocks are now available at a cheaper rate, it will be prudent for investors to consider such stocks for long-term benefits. It has been observed that growth stocks outshine value stocks during economic downturns. However, as the economy starts to pick up pace post the pandemic-led economic mayhem, value stocks are expected to outperform the market.
Investors can consider investing in the below three companies during these trying times.
Our first pick is Quidel, a key provider of rapid diagnostic testing solutions, cellular-based virology assays and molecular diagnostic systems. This Zacks Rank #1 (Strong Buy) company reported solid third-quarter 2021 results in November, recording strong sales of COVID-19 products. Quidel received the CE Mark for Savanna multiplex molecular analyzer and Savanna RVP4 assay during the quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The stock’s P/E stands at 10.3, currently trading at a discount to its industry’s P/E of 23.6. Further, its P/S ratio is 3.6 compared with the industry’s 4.2. Quidel expects a Return on Equity of 62.2%.
The second stock on our list is Cerus, a well-known biomedical products company providing the INTERCEPT Blood System to enhance blood safety. This Zacks Rank #2 (Buy) company’s third-quarter 2021 results (released in November) reflected revenue uptick on the back of increased sales of INTERCEPT platelet products to blood center customers across the United States.
The company expects revenue growth of 19.7% and earnings per share growth of 16.4% for 2022.
Key provider of software and services NextGen Healthcare is the final stock on our list. This month, the Zacks Rank #2 company announced that El Centro Family — a nonprofit federally qualified health center — has selected the NextGen Enterprise platform to serve its rapidly expanding community.
The stock’s P/E stands at 18.6, which is currently trading at a discount to its industry’s P/E of 22.3. Further, its P/S ratio is 2.1 compared with the industry’s 4.8. The company expects revenue growth of 5.6% for fiscal 2022.
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3 Beaten-Down Medical Product Stocks to Buy on a Turnaround in 2022
As 2021 comes to an end where relentless efforts were made to contain the pandemic, infections are resurfacing due to the latest omicron variant. This latest strain, which is suspected to be more contagious and deadly, again reminds investors of the period of widespread lockdowns and economic doldrums.
However, the Biden administration is not yet mulling further lockdown measures or stricter restrictions. This is expected to keep investors’ sentiments upbeat ahead of the new year.
With investors’ sentiment currently buoyant and no indication of another economic standstill, the MedTech sector of the broader U.S. economy is expected to keep pace with the ongoing demand and ramp up their production scales.
Although economic uncertainty prevails due to the surging omicron cases and prevailing delta variant, it would be prudent for investors to focus on those fundamentally-sound stocks that are currently trading below their actual potential. Considering this, Quidel Corporation (QDEL - Free Report) , Cerus Corporation (CERS - Free Report) and NextGen Healthcare, Inc. seem like the right picks.
Medical Products: A Snapshot
Although the overall MedTech sector is expected to perform well despite the dominant omicron strain resulting in a surge of cases, investors should direct their attention to the Medical Products space. This space includes some of those companies that have been actively fighting the pandemic as well as non-COVID-19 companies. For instance, renowned global provider of life science reagents and services, Maravai LifeSciences Holdings, Inc. (MRVI - Free Report) , reported solid segmental revenues in its third-quarter 2021 results in October. Robust overall top line and Nucleic Acid Production segment’s performances of MRVI were driven by continued strong demand for the company’s proprietary CleanCap analogs owing to COVID-19 vaccine manufacturers scaling up their production as well as increased demand for mRNA products. Maravai LifeSciences currently projects 1.9% earnings growth for 2022.
The non-COVID-19 companies, which suffered severe setbacks amid the pandemic, are gradually on the rebound due to the healthcare system and hospitals’ refocus on non-COVID patients. With no imminent indications of another economic shutdown, these companies are expected to witness continued growth recovery.
Owing to the pandemic-led uncertainty, prices of various fundamentally-sound stocks are yet to outperform the market and are currently selling at a discount. Investing in such stocks would be wise for investors keen on reaping long-term benefits. It is to be noted, during the pre-pandemic time, most of such stocks were expensive to buy based on their otherwise robust long-term growth parameters.
3 Stocks to Buy
Given that fundamentally-strong stocks are now available at a cheaper rate, it will be prudent for investors to consider such stocks for long-term benefits. It has been observed that growth stocks outshine value stocks during economic downturns. However, as the economy starts to pick up pace post the pandemic-led economic mayhem, value stocks are expected to outperform the market.
Investors can consider investing in the below three companies during these trying times.
Our first pick is Quidel, a key provider of rapid diagnostic testing solutions, cellular-based virology assays and molecular diagnostic systems. This Zacks Rank #1 (Strong Buy) company reported solid third-quarter 2021 results in November, recording strong sales of COVID-19 products. Quidel received the CE Mark for Savanna multiplex molecular analyzer and Savanna RVP4 assay during the quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The stock’s P/E stands at 10.3, currently trading at a discount to its industry’s P/E of 23.6. Further, its P/S ratio is 3.6 compared with the industry’s 4.2. Quidel expects a Return on Equity of 62.2%.
The second stock on our list is Cerus, a well-known biomedical products company providing the INTERCEPT Blood System to enhance blood safety. This Zacks Rank #2 (Buy) company’s third-quarter 2021 results (released in November) reflected revenue uptick on the back of increased sales of INTERCEPT platelet products to blood center customers across the United States.
The company expects revenue growth of 19.7% and earnings per share growth of 16.4% for 2022.
Key provider of software and services NextGen Healthcare is the final stock on our list. This month, the Zacks Rank #2 company announced that El Centro Family — a nonprofit federally qualified health center — has selected the NextGen Enterprise platform to serve its rapidly expanding community.
The stock’s P/E stands at 18.6, which is currently trading at a discount to its industry’s P/E of 22.3. Further, its P/S ratio is 2.1 compared with the industry’s 4.8. The company expects revenue growth of 5.6% for fiscal 2022.