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Two Small-Cap Healthcare Stocks That are Cheap Buys Right Now
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There are not many opportunities to pick up cheap healthcare stocks because of the high demand for investing in the space. Small-cap healthcare stocks tend to be more under the radar though. Some of these overlooked companies look quite cheap, but not all of them are worth buying. For this reason, it is important to use fundamental criteria so that you can screen for investments which are worth putting money into.
By combining the Zacks Rank with fundamental valuation metrics, we’ve managed to find two cheap companies from the healthcare industry. Buying them now could prove to be a wise decision. After all, their futures look bright and the price is right.
ANI Pharmaceuticals is a specialty pharmaceutical company which makes and markets branded and generic prescription drugs. They manufacture cough and cold medicine, antacids, laxatives, stomach remedies, and other products. The company also offers contract manufacturing services for other pharmaceutical companies. ANIP is a Zacks Rank #1 (Strong Buy), and it trades at a forward PE ratio of just 16.0. The average stock trades at a price-to-earnings multiple of around 20, and ANIP stock is selling for well under that mark.
ANI Pharmaceuticals’ earnings are projected to grow by 42.86% this year. Sales are expected to see even more growth, with revenues projected to increase by 61.85%. The company is profitable, and its trailing twelve month net margin of 15.82% is proof of that. ANIP’s net income shrunk considerably between 2014 and 2015, but consistent growth to the top line over the last four years gives me hope that this company can be very profitable over time.
Our EPS consensus estimate has trended upwards over the last 60 days. Two months ago, our current year consensus estimated earnings of $1.45 for 2016. Now, the consensus predicts earnings of $3.29 per share this year. This was likely helped by the drug which was acquired by ANI Pharmaceuticals in April. The company bought the drug Inderal LA from Cranford Pharmaceuticals, and it is used to treat patients suffering from high blood pressure.
PharMerica Corporation-
PharMerica Corporation is an institutional pharmacy services provider which offers customer service and innovative pharmacy solutions to institutional customers and patients in long-term care facilities. PharMerica is a Zacks Rank #1 (Strong Buy), and it gets an “A” for value in our Style Scores. The company trades at a PEG of just 0.85. A stock trading at a PEG under 1 may be undervalued. Its price-to-book is 1.44 and PMC’s forward PE is just 11.52, so the company definitely has the traits of a desirable value stock.
PharMerica’s earnings are projected to grow by 31.90% this year. This is great because the company is coming off of one of its best years in terms of net income. Our EPS consensus estimate has improved by a notable clip for the current year. Over the last 60 days, our EPS estimate for this year has jumped from $1.74 to $2.02. The company has a great track record for beating our consensus estimate. In fact, it has beaten the estimate in each of the last four quarters. PharMerica reports its next quarterly earnings in early August.
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Two Small-Cap Healthcare Stocks That are Cheap Buys Right Now
There are not many opportunities to pick up cheap healthcare stocks because of the high demand for investing in the space. Small-cap healthcare stocks tend to be more under the radar though. Some of these overlooked companies look quite cheap, but not all of them are worth buying. For this reason, it is important to use fundamental criteria so that you can screen for investments which are worth putting money into.
By combining the Zacks Rank with fundamental valuation metrics, we’ve managed to find two cheap companies from the healthcare industry. Buying them now could prove to be a wise decision. After all, their futures look bright and the price is right.
ANI Pharmaceuticals Inc-(ANIP - Free Report)
ANI Pharmaceuticals is a specialty pharmaceutical company which makes and markets branded and generic prescription drugs. They manufacture cough and cold medicine, antacids, laxatives, stomach remedies, and other products. The company also offers contract manufacturing services for other pharmaceutical companies. ANIP is a Zacks Rank #1 (Strong Buy), and it trades at a forward PE ratio of just 16.0. The average stock trades at a price-to-earnings multiple of around 20, and ANIP stock is selling for well under that mark.
ANI Pharmaceuticals’ earnings are projected to grow by 42.86% this year. Sales are expected to see even more growth, with revenues projected to increase by 61.85%. The company is profitable, and its trailing twelve month net margin of 15.82% is proof of that. ANIP’s net income shrunk considerably between 2014 and 2015, but consistent growth to the top line over the last four years gives me hope that this company can be very profitable over time.
Our EPS consensus estimate has trended upwards over the last 60 days. Two months ago, our current year consensus estimated earnings of $1.45 for 2016. Now, the consensus predicts earnings of $3.29 per share this year. This was likely helped by the drug which was acquired by ANI Pharmaceuticals in April. The company bought the drug Inderal LA from Cranford Pharmaceuticals, and it is used to treat patients suffering from high blood pressure.
PharMerica Corporation-
PharMerica Corporation is an institutional pharmacy services provider which offers customer service and innovative pharmacy solutions to institutional customers and patients in long-term care facilities. PharMerica is a Zacks Rank #1 (Strong Buy), and it gets an “A” for value in our Style Scores. The company trades at a PEG of just 0.85. A stock trading at a PEG under 1 may be undervalued. Its price-to-book is 1.44 and PMC’s forward PE is just 11.52, so the company definitely has the traits of a desirable value stock.
PharMerica’s earnings are projected to grow by 31.90% this year. This is great because the company is coming off of one of its best years in terms of net income. Our EPS consensus estimate has improved by a notable clip for the current year. Over the last 60 days, our EPS estimate for this year has jumped from $1.74 to $2.02. The company has a great track record for beating our consensus estimate. In fact, it has beaten the estimate in each of the last four quarters. PharMerica reports its next quarterly earnings in early August.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>