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3 Affordable MedTech Growth Stocks to Buy Amid Market Unrest

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Since the start of the pandemic, stocks have been pushed to the panic-driven sell territory time and again. Particularly since the ‘Black Monday’ debacle in March, the market has been extremely volatile.

Rescue packages and a number of monetary stimulus announced during this period failed to address the market unrest, making investors jittery about pouring in money into stocks.

Recently, the major benchmark indices have started improving. However, with the number of new coronavirus cases escalating with each passing day, this trend might not last long.

MedTech Scenario

MedTech stocks have been hit by the postponement of various non-essential procedures amid the pandemic. While companies producing critical care products in demand during the pandemic, like ventilators, have had an impressive run, others depending majorly on surgical procedures or oncology-related work have been the worst affected. A notable example of such a company is Myriad Genetics, Inc. (MYGN - Free Report) , which is a key player in cancer diagnostics space. Over the past six months, the company’s share price has plummeted 58.9% against the industry’s 10.7% rise.

Another company which witnessed first-quarter 2020 revenues decline due to a significant and sudden fall in elective procedure volumes across all regions is orthopaedic major Zimmer Biomet Holdings, Inc. (ZBH - Free Report) . Over the past six months, it has lost 21.3% compared with the industry’s 9.6% decline.

Growth: Ideal Strategy to Invest Now

This widespread panic selling of MedTech stocks have been dragging share prices significantly down over the past few months. This has made many stocks with good long-term growth potential dirt cheap. Interestingly, most of such stocks were actually expensive during the pre-pandemic period, given their otherwise robust long-term growth parameters.

Investors can choose to invest in these MedTech stocks, which have a strong long-term growth potential and generate strong shareholders return to maximize their capital gains when the pandemic gets over.

3 Stocks to Buy

Given that most stocks are now available at never-seen-before prices, investors can choose those with good growth potential.

To narrow down the list, we have selected stocks with a Growth Style Score of A or B. Our research shows that stocks with a Growth 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.

These stocks have a strong return on equity (ROE) or a healthy dividend paying history, both of which are indicators of sustainable growth. On falling share prices over the past few months, these stocks are extremely attractive picks now.

Listed below are three companies that investors can consider during these trying times.

Anthem, Inc. , a large publicly-traded managed care organizations (in terms of membership), is in various meaningful partnerships and expects these to prove accretive. The company presently carries a Zacks Rank #2 and has a Growth Score of A. Its acquisitions and collaborations complement its inorganic growth profile and help it boost Medicare Advantage growth. Its guidance for 2020 is also impressive.

It estimates earnings per share (EPS) growth at a very impressive 14.6% compared with the industry’s forecast of 3.9%. Further, its historical dividend growth currently stands at 8.5% with the first-quarter 2020 payout rate being 16.9%. Over the past six months, the stock has lost 13.6% compared with the industry’s 0.9% fall.


 

Renowned dialysis services provider DaVita Inc.’s (DVA - Free Report) acquisition of several dialysis centers overseas and a solid guidance for 2020 are encouraging. The company presently sports a Zacks Rank #1 and has a Growth Score of B. Further, it launched the DaVita Venture Group in May. Through this, it plans to accelerate efforts to develop and deploy solutions aimed at improving the health care and quality of life for patients of kidney diseases and related chronic conditions.

The stock’s ROE stands at a very impressive 32.5% compared with the industry’s 13.5%. Further, its projected EPS growth stands at 13.6% against the industry’s projection of a fall of 9.3%. Since March beginning, shares of DVA has gained 5.6% compared with the industry’s 9% rise.


 

Addus HomeCare Corporation (ADUS - Free Report) , a provider of comprehensive home care services, is another alternative for investors. The company presently carries a Zacks Rank #2 and has a Growth Score of A. It recently closed an acquisition deal of Montana-based A Plus Health Care, strengthening its presence in current markets. Its solid pipeline of potential acquisitions, in addition to organic growth opportunities, buoys optimism in the stock.

Its projected EPS growth stands at a solid 13.3% against the industry’s anticipation of a fall of 9.3%. Further, its historical cash flow growth is impressive at 18.5% compared with the industry’s 13%. The stock’s ROE is a striking 16.4% compared with the industry’s 13.5%. Over the past six months, it has lost 8% compared with the industry’s 0.8% fall.


 

5 Stocks to Soar Past the Pandemic: In addition to the companies you learned about above, we invite you to learn about 5 cutting-edge stocks that could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of the decade.

See the 5 high-tech stocks now>>

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