We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Welcome to Episode #295 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
We all know where the value stocks are in 2022. Energy is cheap, as are the banks, agriculture stocks, homebuilders and some retailers.
But what about healthcare?
Many of the stocks soared during the pandemic and the biotechs haven’t been cheap for years. But with the stock market sell-off in 2022, are there any cheap healthcare stocks?
Screening for Value Healthcare Stocks
Tracey put together a basic, three criteria screen to search for these stocks. She started by looking only in the Medical sector.
Then she added the Zacks Rank of #1 (Strong Buy) and #2 (Buy) which should provide stocks that have rising earnings estimates.
It doesn’t mean there’s earnings growth, but something positive is going on to have the analysts raising earnings estimates. And that’s been rare in 2022 as companies cut guidance and lower forecasts.
To find value, Tracey looked for a forward P/E of 15 or less.
That was it. Just a basic screen which included the top Ranked stocks.
AMN Healthcare is a medical staffing company which handles staffing of travel nurses and other medical professionals. AMN Healthcare is a Zacks Rank #1 (Strong Buy).
4 estimates have been raised in the last 30 days, pushing up the 2022 Zacks Consensus Estimate. Earnings are expected to jump 39% in 2022.
AMN Healthcare is cheap, with a forward P/E of 9.2.
Should AMN Healthcare be on your short list?
2. AmerisourceBergen Corp.
AmerisourceBergen is a big cap pharmaceutical company with a market cap of $31 billion. It’s a Zacks Rank #2 (Buy) stock.
Earnings are expected to jump 18.8% in fiscal 2022 and another 4.5% in fiscal 2023.
AmerisourceBergen pays a dividend, currently yielding 1.2%.
It trades with a forward P/E of 13.4.
Is AmerisourceBergen cheap enough for value investors to dive in?
ProPhase Labs has a supplements and OTC manufacturing business but is now developing into a diagnostics and genomics company. It has been doing COVID-19 testing, which has boosted revenue.
Earnings are expected to jump 475% in 2022 to $1.15 from just $0.20 last year. But they’re expected to tumble 89% to just $0.12 next year.
ProPhase Labs had a record second quarter with revenue up 218% to $29.1 million.
This Zacks Rank #2 (Buy) paid a special cash dividend of $0.30 on June 30 and has a $6 million stock repurchase.
ProPhase Labs trades with a forward P/E of just 10.
Image: Bigstock
5 Cheap Healthcare Stocks in 2022
Welcome to Episode #295 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
We all know where the value stocks are in 2022. Energy is cheap, as are the banks, agriculture stocks, homebuilders and some retailers.
But what about healthcare?
Many of the stocks soared during the pandemic and the biotechs haven’t been cheap for years. But with the stock market sell-off in 2022, are there any cheap healthcare stocks?
Screening for Value Healthcare Stocks
Tracey put together a basic, three criteria screen to search for these stocks. She started by looking only in the Medical sector.
Then she added the Zacks Rank of #1 (Strong Buy) and #2 (Buy) which should provide stocks that have rising earnings estimates.
It doesn’t mean there’s earnings growth, but something positive is going on to have the analysts raising earnings estimates. And that’s been rare in 2022 as companies cut guidance and lower forecasts.
To find value, Tracey looked for a forward P/E of 15 or less.
That was it. Just a basic screen which included the top Ranked stocks.
It returned just 12 stocks.
5 Cheap Healthcare Stocks in 2022
1. AMN Healthcare (AMN - Free Report)
AMN Healthcare is a medical staffing company which handles staffing of travel nurses and other medical professionals. AMN Healthcare is a Zacks Rank #1 (Strong Buy).
4 estimates have been raised in the last 30 days, pushing up the 2022 Zacks Consensus Estimate. Earnings are expected to jump 39% in 2022.
AMN Healthcare is cheap, with a forward P/E of 9.2.
Should AMN Healthcare be on your short list?
2. AmerisourceBergen Corp.
AmerisourceBergen is a big cap pharmaceutical company with a market cap of $31 billion. It’s a Zacks Rank #2 (Buy) stock.
Earnings are expected to jump 18.8% in fiscal 2022 and another 4.5% in fiscal 2023.
AmerisourceBergen pays a dividend, currently yielding 1.2%.
It trades with a forward P/E of 13.4.
Is AmerisourceBergen cheap enough for value investors to dive in?
3. Assertio Holdings, Inc. (ASRT - Free Report)
Assertio is a small cap specialty pharmaceutical company with a focus on neurology, hospital and pain and inflammation. It’s a Zacks Rank #2 (Buy).
Assertio recently raised its revenue outlook for the year to $137 million from $129 million due to higher sales and improving gross margins.
It has positive cash flow and $52.3 million cash on hand.
Assertio is dirt cheap, with a forward P/E of just 5.6. But it also trades under $5.
Should Assertio be on your short list?
4. ProPhase Labs (PRPH - Free Report)
ProPhase Labs has a supplements and OTC manufacturing business but is now developing into a diagnostics and genomics company. It has been doing COVID-19 testing, which has boosted revenue.
Earnings are expected to jump 475% in 2022 to $1.15 from just $0.20 last year. But they’re expected to tumble 89% to just $0.12 next year.
ProPhase Labs had a record second quarter with revenue up 218% to $29.1 million.
This Zacks Rank #2 (Buy) paid a special cash dividend of $0.30 on June 30 and has a $6 million stock repurchase.
ProPhase Labs trades with a forward P/E of just 10.
Is ProPhase a hidden gem?
5. Patterson Companies (PDCO - Free Report)
Patterson Companies operates in dental and animal health. It’s a Zacks Rank #2 (Buy).
8 estimates have been raised for this fiscal year in the last 60 days. Earnings are expected to rise 1.3% this year and 7.7% next fiscal year.
Patterson pays a dividend, currently yielding 3.6%.
It is cheap, with a forward P/E of 12.6.
Should Patterson be on your short list?
What Else Should You Know About Cheap Healthcare Stocks?
Tune into this week’s podcast to find out.