Analysts are favoring the healthcare sector in 2013 due to strong projected growth supported by an aging population, an increase in chronic diseases, and industry M&A activity. With this in mind, we screened for healthcare stocks that have solid returns that are also cheaply priced. [Related: Find Good Buys With Strong Returns and High Qualityâ€‹]
We screened for companies in the healthcare sector with a return on assets over 10% and a price-to-book value under 2. These metrics were used to find potential high quality stocks, which are stocks that have a gross profit margin divided by total assets over 33%. This ratio can be computed by taking gross profit (Revenue – COGS) from the income statement and the total asset amount from the balance sheet.
Below is our list of great value stocks that are high in quality in the healthcare sector:
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1. AmSurg Corp. (AMSG, Earnings, Analysts, Financials): Engages in the development, acquisition, and operation of ambulatory surgery centers in partnership with physicians in the United States. Market cap at $1.06B, most recent closing price at $32.96.
P/B = 1.57 ROA = 14.23% Quality = .38
2. Columbia Laboratories Inc. (CBRX, Earnings, Analysts, Financials): Engages in the research, development, and commercialization of women's healthcare and endocrinology products. Market cap at $53.38M, most recent closing price at $0.61.
P/B = 1.70 ROA = 17.58% Quality = .87
3. Cyanotech Corporation (CYAN, Earnings, Analysts, Financials): Produces natural products derived from microalgae. Cyanotech is engaged in the cultivation and production of microalgae into natural health and nutrition products.
P/B = 1.49 ROA = 13.73% Quality = .51
4. Hi Tech Pharmacal Co. Inc. (HITK, Earnings, Analysts, Financials): Develops, manufactures, markets, and sells generic, prescription, over-the-counter (OTC), and nutritional products in liquid and semisolid dosage forms in the United States. Market cap at $466.54M, most recent closing price at $34.38.
P/B = 1.88 ROA = 13.24% Quality = .46
5. SciClone Pharmaceuticals, Inc. (SCLN, Earnings, Analysts, Financials): Engages in the development and commercialization of novel therapeutics for the treatment of oncology, infectious diseases, cardiovascular, urological, respiratory, and central nervous system disorders in the People's Republic of China and internationally. Market cap at $265.75M, most recent closing price at $4.81.
P/B = 1.86 ROA = 10.24% Quality = .57
6. Spectrum Pharmaceuticals, Inc. (SPPI, Earnings, Analysts, Financials): Spectrum Pharmaceuticals, Inc., a commercial-stage biotechnology company, primarily focuses on oncology and hematology. Market cap at $466.84M, most recent closing price at $7.76.
P/B = 1.64 ROA = 24.03% Quality = .43
(List compiled by Nick Sousa)
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Analyze These Ideas: Getting StartedRead descriptions for all companies mentioned Access a performance overview for all stocks in the list Compare analyst ratings for the companies mentioned Compare analyst ratings to annual returns for stocks mentioned Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, FilingsAmSurg Corp. (AMSG, Chart, Download SEC Filings) Columbia Laboratories Inc. (CBRX, Chart, Download SEC Filings) Cyanotech Corporation (CYAN, Chart, Download SEC Filings) Hi Tech Pharmacal Co. Inc. (HITK, Chart, Download SEC Filings) SciClone Pharmaceuticals, Inc. (SCLN, Chart, Download SEC Filings) Spectrum Pharmaceuticals, Inc. (SPPI, Chart, Download SEC Filings)
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