Healthcare has been a newsworthy topic for decades, and that is unlikely to cease anytime soon as the Republican effort to repeal and replace the Affordable Care Act, or Obamacare, ramps up ahead of a key Sept. 30 deadline.
One of the most recent bills, from Republican Sens. Lindsey Graham of South Carolina and Louisiana’s Bill Cassidy, plans to convert money that the ACA uses on insurance subsidies and Medicaid into block grants that would allow states to design their own health care systems.
The bill was proposed in the hopes that it will be passed before October, when a simple majority is all that is required. After the end of the month, any healthcare legislation will require 60 votes.
On top of the Graham-Cassidy proposal, a bipartisan healthcare plan was also recently announced, along with a different bill that calls for the creation of a government-sponsored national healthcare system, which was proposed by Sen. Bernie Sanders.
But even if none of these new healthcare proposals are able to make headway in Washington, the healthcare industry is unlikely to slow down, as many drug makers, HMOs, hospitals, medical device companies, and many more continue to grow.
With the industry once again be under the microscope, let’s take a look at some healthcare and medical industry stocks and their fundamentals to see if investors might consider buying in these relatively uncertain times.
1. Luminex Corporation (LMNX - Free Report)
This Austin, Texas-based company develops and manufactures products to help tests for infectious diseases. Luminex also markets its open-architecture designed research platform to clients for clinical and academic research, as well as biodefense. The company is currently a Zacks Rank #1 (Strong Buy) stock.
Luminex has a P/B ratio of 2.07, which is far better than the “Medical – Instruments” industry’s 3.97, and it could mean the company’s stock is currently undervalued. On top of its discounted price, the company looks like it could be a strong choice for value investors because its cash flow per share of $0.78 tops the industry average of a $0.10 loss.
According to our current Zacks Consensus Estimates, the company’s earnings are expected to skyrocket 150% next quarter and jump 25% for the year. Also, Luminex’s sales are set to gain 4.21% in the current quarter and pop 12.75% for the year to hit $306.66 million.
2. Ligand Pharmaceuticals Incorporated (LGND - Free Report)
Ligand Pharmaceuticals focuses on technologies that aim to help pharmaceutical companies discover and develop new medicines. The company has a net margin of 7.39%, which blows away the “Biomedical and Genetic” industry average and underscores the fact that Ligand has a proven product portfolio—a fact that eludes many early-stage pharma companies.
Based on our current consensus estimate, Ligand’s sales are expected to climb 44.42% this quarter and 23.44% for the year. The company is currently a Zacks Rank #1 (Strong Buy) and sports a “B” grade for both Growth and Momentum in our Style Scores system.
Although Ligand has experienced a 16.91% 52-week price change and rests near the top of its 52-week high, the company might still have room to grow. Ligand has received one upward earnings estimate revision for next quarter within the last 60 days. In that same time frame, the company received two positive revisions for its full-year and following year estimates.
3. Centene Corporation (CNC - Free Report)
This HMO provider specializes in providing the under-insured and uninsured with health plans through Medicaid, Medicare, and other programs. The company was recently ranked #19 on Fortune’s annual “Change the World” list based on its commitment to continue to cover Affordable Care Act customers. Centene is currently a Zacks Rank #2 (Buy) and scored an “A” for both Value and Growth in our Style Scores system.
The company has received 11 positive full-year earnings estimate revisions within the last 60 days. Centene’s full-year earnings are projected to surge 11.04% to hit $4.88 per share. The company’s revenues for the year are expected to climb 16.19% to reach $47.57 billion. And with a price to sales ratio of 0.36, investors get a lot of bang for their respective bucks.
4 Promising Stock Picks to Keep an Eye On
With news stories about computer hacking and identity theft becoming increasingly commonplace, the cybersecurity industry looks like a promising investment opportunity. But which stocks should you buy? Zacks just released Cybersecurity: An Investor’s Guide to Locking Down Profits to help answer this question.
This new Special Report gives you the information you need to make well-informed investment choices in this space. More importantly, it also highlights 4 cybersecurity picks with strong profit potential. Get the new Investing Guide now>>