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4 Cheap MedTech Stocks Poised to Beat Industry Post-Pandemic
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MedTech companies have been hit hard since the coronavirus outbreak took the shape of a pandemic in March. Most of the companies either withdrew or lowered their guidance while announcing quarterly results in the wake of uncertainties related to the pandemic. This led to a bumpy ride for major benchmark indices like the Dow Jones Industrial Average and NASDAQ Composite Index.
The pandemic-led stock price crash in March ended the longest-ever bull market run for the U.S. economy, forcing it into a steady downfall. This sparked tensions among investors, leading to widespread panic selling as well as apprehensions over investing in MedTech stocks.
Free Fall of MedTech Stocks
MedTech companies have been one of the most affected by the deferral of various non-essential procedures amid the pandemic. This fall in procedure volume is driving stock prices down. Orthopedic and cardiovascular companies, which majorly depend on surgical procedures, are one of the worst-affected due to widespread stay-at-home orders and postponement of elective surgical procedures due to fear of contracting the infection.
The widespread and stretched panic selling of MedTech stocks have been dragging share prices significantly down over the past few months and making fundamentally-sound stocks dirt cheap. It is to be noted, during the pre-pandemic time, most of such stocks were actually expensive to buy based on their otherwise robust long-term growth parameters.
4 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 gradually expected to outperform the market.
To narrow down the list, we have selected those with a Value Style Score of A or B. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best upside potential. You can see the complete list of today’s Zacks #1 Rank stocks here.
Listed below are four companies that investors can consider during these trying times. All the four stocks carry a Zacks Rank #2 and a Value Score of B.
Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp’s first-quarter 2020 performance was impressive despite the pandemic-led business disruptions. New partnerships with leading pharmaceutical and biotechnology companies on potential antivirals, treatments and vaccines for COVID-19 are expected to bode well for the company’s Covance business.
The stock’s P/E stands at 17.1, which is currently trading at a discount to its industry’s P/E of 59.4. Over the past five years, the company has grown 9.4%, better than the industry’s 8.1%. Over the past three months, it has rallied 43.2%, outperforming the industry’s 20.3% rise.
Women’s healthcare major Hologic, Inc.’s (HOLX - Free Report) robust second-quarter fiscal 2020 revenues resulting from strength in majority of segments buoy optimism. Its robust molecular diagnostics sub-segment grew impressively in the second quarter of fiscal 2020 and holds long-term potential as well. Its continued placement of fully-automated Panther system along with sustained solid uptake of Aptima Women's health assay menu looks encouraging.
The stock’s PEG stands at 3.5, trading at a discount to its industry’s PEG of 4.1. Its return on equity currently stands at 30.5% against the industry’s negative return of 17.4%. Over the past three months, it has rallied 67.4%, outperforming the industry’s 26.9% rise.
Cerner Corporation is likely to benefit from electronic health record, electronic patient record or electronic medical record platforms that provide patient care in acute inpatient and outpatient settings. International revenues have also improved of late. Cerner also follows a strategy of acquiring complementary businesses that enables the company to expand its solutions, device offerings and services, and grow its market and client base.
The stock’s PEG stands at 1.9, which is trading at a discount to its industry’s PEG of 2.1. Its return on equity currently stands at 18.2% against the industry’s negative return to equity of 12.1%. Over the past three months, although it improved 10.6%, it underperformed its industry’s 45% rally. However, looking at the company’s strong fundamentals, we expect the stock to rebound.
Dental and animal health player Patterson Companies, Inc.'s (PDCO - Free Report) consistent efforts to drive profitability in core business look impressive. We believe that a diverse product portfolio, strong veterinary business prospects, accretive acquisitions and strategic partnerships are acting as primary catalysts. Encouraged by strong performance, the company raised outlook for fiscal 2020, thereby instilling investor optimism in the stock.
The stock’s P/E stands at 16.3, trading at a discount to its industry’s P/E of 59.4. Its sales-to-asset ratio currently stands at 1.6 compared with the industry’s 1.1. Over the past three months, the stock has rallied 53.2% compared with the industry’s 20.3% rise.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
4 Cheap MedTech Stocks Poised to Beat Industry Post-Pandemic
MedTech companies have been hit hard since the coronavirus outbreak took the shape of a pandemic in March. Most of the companies either withdrew or lowered their guidance while announcing quarterly results in the wake of uncertainties related to the pandemic. This led to a bumpy ride for major benchmark indices like the Dow Jones Industrial Average and NASDAQ Composite Index.
The pandemic-led stock price crash in March ended the longest-ever bull market run for the U.S. economy, forcing it into a steady downfall. This sparked tensions among investors, leading to widespread panic selling as well as apprehensions over investing in MedTech stocks.
Free Fall of MedTech Stocks
MedTech companies have been one of the most affected by the deferral of various non-essential procedures amid the pandemic. This fall in procedure volume is driving stock prices down. Orthopedic and cardiovascular companies, which majorly depend on surgical procedures, are one of the worst-affected due to widespread stay-at-home orders and postponement of elective surgical procedures due to fear of contracting the infection.
The widespread and stretched panic selling of MedTech stocks have been dragging share prices significantly down over the past few months and making fundamentally-sound stocks dirt cheap. It is to be noted, during the pre-pandemic time, most of such stocks were actually expensive to buy based on their otherwise robust long-term growth parameters.
4 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 gradually expected to outperform the market.
To narrow down the list, we have selected those with a Value Style Score of A or B. Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best upside potential. You can see the complete list of today’s Zacks #1 Rank stocks here.
Listed below are four companies that investors can consider during these trying times. All the four stocks carry a Zacks Rank #2 and a Value Score of B.
Laboratory Corporation of America Holdings (LH - Free Report) or LabCorp’s first-quarter 2020 performance was impressive despite the pandemic-led business disruptions. New partnerships with leading pharmaceutical and biotechnology companies on potential antivirals, treatments and vaccines for COVID-19 are expected to bode well for the company’s Covance business.
The stock’s P/E stands at 17.1, which is currently trading at a discount to its industry’s P/E of 59.4. Over the past five years, the company has grown 9.4%, better than the industry’s 8.1%. Over the past three months, it has rallied 43.2%, outperforming the industry’s 20.3% rise.
Women’s healthcare major Hologic, Inc.’s (HOLX - Free Report) robust second-quarter fiscal 2020 revenues resulting from strength in majority of segments buoy optimism. Its robust molecular diagnostics sub-segment grew impressively in the second quarter of fiscal 2020 and holds long-term potential as well. Its continued placement of fully-automated Panther system along with sustained solid uptake of Aptima Women's health assay menu looks encouraging.
The stock’s PEG stands at 3.5, trading at a discount to its industry’s PEG of 4.1. Its return on equity currently stands at 30.5% against the industry’s negative return of 17.4%. Over the past three months, it has rallied 67.4%, outperforming the industry’s 26.9% rise.
Cerner Corporation is likely to benefit from electronic health record, electronic patient record or electronic medical record platforms that provide patient care in acute inpatient and outpatient settings. International revenues have also improved of late. Cerner also follows a strategy of acquiring complementary businesses that enables the company to expand its solutions, device offerings and services, and grow its market and client base.
The stock’s PEG stands at 1.9, which is trading at a discount to its industry’s PEG of 2.1. Its return on equity currently stands at 18.2% against the industry’s negative return to equity of 12.1%. Over the past three months, although it improved 10.6%, it underperformed its industry’s 45% rally. However, looking at the company’s strong fundamentals, we expect the stock to rebound.
Dental and animal health player Patterson Companies, Inc.'s (PDCO - Free Report) consistent efforts to drive profitability in core business look impressive. We believe that a diverse product portfolio, strong veterinary business prospects, accretive acquisitions and strategic partnerships are acting as primary catalysts. Encouraged by strong performance, the company raised outlook for fiscal 2020, thereby instilling investor optimism in the stock.
The stock’s P/E stands at 16.3, trading at a discount to its industry’s P/E of 59.4. Its sales-to-asset ratio currently stands at 1.6 compared with the industry’s 1.1. Over the past three months, the stock has rallied 53.2% compared with the industry’s 20.3% rise.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>