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Welcome to Episode #290 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.
There’s plenty of value stocks in 2022 and they aren’t all in energy or the banks.
Healthcare stocks got a big boost during the first year of the pandemic as investors rushed to buy diagnostic and vaccine companies. But that trade was quickly over as investors rotated into the large cap growth stocks.
But now, in the summer of 2022, healthcare stocks have been ignored and are cheap.
Screening for Top Cheap Healthcare Stocks
Tracey ran a basic screen using the Zacks Medical sector, a forward P/E under 15, a stock price above $5 a share, and a top Zacks Rank of #1 (Strong Buy) or #2 (Buy).
The top Zacks Ranks should give stocks that have rising earnings estimates which is key in this economic environment where companies have been cutting guidance.
Maravai LifeSciences enables the development of drug therapies, diagnostics and novel vaccines for customers in biopharma, vaccines, diagnostics and cell and gene therapy. It’s a mid-cap company with a market cap of $6.9 billion.
In the first quarter, Maravai LifeSciences had record quarterly revenue, up 65% year-over-year.
But shares are down 35.8% year-to-date. After the sell-off, Maravai LifeSciences shares are cheap with a forward P/E of 14.5 as earnings are expected to rise 15.6% in 2022.
Sensus Healthcare is a small cap medical device company with a market cap of $169.7 million. It makes a non-surgical treatment, called Superficial Radiation Therapy, for non-melanoma skin cancer.
First quarter revenue was up 237% to $10.3 million.
Shares are up 41% year-to-date but Sensus Healthcare is still cheap with a forward P/E of 6.7. Earnings are expected to rise 512% this year.
Sensus Healthcare is a Zacks Rank #2 (Buy) stock.
Should value investors be looking at the small caps like Sensus Healthcare for long-term buying opportunities?
Image: Bigstock
5 Cheap Healthcare Stocks in 2022
Welcome to Episode #290 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.
There’s plenty of value stocks in 2022 and they aren’t all in energy or the banks.
Healthcare stocks got a big boost during the first year of the pandemic as investors rushed to buy diagnostic and vaccine companies. But that trade was quickly over as investors rotated into the large cap growth stocks.
But now, in the summer of 2022, healthcare stocks have been ignored and are cheap.
Screening for Top Cheap Healthcare Stocks
Tracey ran a basic screen using the Zacks Medical sector, a forward P/E under 15, a stock price above $5 a share, and a top Zacks Rank of #1 (Strong Buy) or #2 (Buy).
The top Zacks Ranks should give stocks that have rising earnings estimates which is key in this economic environment where companies have been cutting guidance.
This screen returned 16 stocks.
5 Cheap Healthcare Stocks in 2022
1. Merck (MRK - Free Report)
Merck is one of the large global pharmaceutical companies. Shares are down 17.1% in 2022, even though earnings are expected to rise 21.6% in 2022.
Merck shares are cheap, with a forward P/E of 12.6. It’s a Zacks Rank #1 (Strong Buy).
Investors also get a dividend yielding 2.9%.
Should Merck be on your short list?
2. Maravai LifeSciences (MRVI - Free Report)
Maravai LifeSciences enables the development of drug therapies, diagnostics and novel vaccines for customers in biopharma, vaccines, diagnostics and cell and gene therapy. It’s a mid-cap company with a market cap of $6.9 billion.
In the first quarter, Maravai LifeSciences had record quarterly revenue, up 65% year-over-year.
But shares are down 35.8% year-to-date. After the sell-off, Maravai LifeSciences shares are cheap with a forward P/E of 14.5 as earnings are expected to rise 15.6% in 2022.
It’s is a Zacks Rank #2 (Buy).
Is Maravai LifeSciences on sale?
3. Sensus Healthcare (SRTS - Free Report)
Sensus Healthcare is a small cap medical device company with a market cap of $169.7 million. It makes a non-surgical treatment, called Superficial Radiation Therapy, for non-melanoma skin cancer.
First quarter revenue was up 237% to $10.3 million.
Shares are up 41% year-to-date but Sensus Healthcare is still cheap with a forward P/E of 6.7. Earnings are expected to rise 512% this year.
Sensus Healthcare is a Zacks Rank #2 (Buy) stock.
Should value investors be looking at the small caps like Sensus Healthcare for long-term buying opportunities?
4. PetIQ (PETQ - Free Report)
PetIQ is a leading pet medication and wellness company. Not all healthcare opportunities are on the human side.
Shares have fallen 23.4% year-to-date and are down 51% over the last year. They were recently at 5-year lows.
PetIQ is cheap, at a forward P/E of 14.4. But is it cheap enough? Sales are expected to rise just 5.5% in 2022.
Should investors be waiting on the sidelines on PetIQ?
5. AbbVie (ABBV - Free Report)
AbbVie is a large cap pharmaceutical company that owns Humira and popular aesthetic drugs Botox and Juvederm.
AbbVie shares are up about 10% year-to-date but are still cheap, with a forward P/E of 10.7.
Dividend investors are big fans of AbbVie, as it pays an attractive dividend yielding 3.8%.
Is AbbVie a place to hide out in 2022 during the market volatility?
What Else Do You Need to Know About Cheap Healthcare Stocks?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of ABBV in her personal portfolio.]