With the growing medical needs and technological progress, the prospects for the medical industry look impressive. Moreover, healthcare stocks are likely to perform relatively well, no matter economic conditions, because of the inelastic demand for his or her services and products. That’s why we imagine Nature’s Sunshine Products (NATR), Abbott Laboratories (ABT), Humana (HUM), Molina Healthcare (MOH) and McKesson (MCK) are no-brainer stocks to purchase in 2023. Read on.
The healthcare industry that thrived throughout the COVID-19 pandemic is more likely to remain within the highlight within the face of rising health awareness, an aging population and advanced technological breakthroughs.
Moreover, the increasing use of knowledge analytics in healthcare and firms specializing in preventive care are driving the industry forward. In addition, within the face of accelerating smartphone penetration, improved web connectivity and advances in healthcare IT infrastructure are helping to expand the digital healthcare market.
The global digital healthcare market is anticipated to grow by approx CAGR 23.7% by 2030.
In addition, the demand for services and products of medical corporations is inelastic, which makes them ideal holding corporations within the face of market turmoil. According to Jim Cramer of CNBC, healthcare stocks have been fairly stable in 2022 because they’re recession-proof or doing well whatever the broader economic situation.
Given the context, investors might consider buying Nature’s Sunshine Products, Inc. mindless medical stock. (NATR), Abbott Laboratories (ABT), Humana Inc (NOISE), Molina Healthcare, Inc. (MOH) and McKesson Corporation (MCC), in 2023
Nature’s Sunshine Products, Inc. (NATR)
Natural health and wellness company NATR manufactures and sells nutrition and wonder products primarily in Asia, Europe, North America, Latin America and around the globe.
On November 3, 2022, CEO Terrence Moorehead said: “We are confident that we’ll manage this exceptional period of volatility and uncertainty, bolstered by our strong balance sheet and team of field experts.”
NATR striker EV/Sales of 0.38x is 78.4% lower than the industry average of 1.76x. Its futures/ask price of 0.46x is 59.4% lower than the industry average of 1.13x.
The 12-month NATR gross profit margin of 71.59% is 128.2% higher than the industry average of 31.37%. Its 12-month ROTA of 4.96% is 48% higher than the industry average of three.60%.
NATR selling, general and administrative expenses amounted to $36.79 million within the third quarter ended September 30, 2022, down 6.9% year-on-year. Its total current liabilities were $63.89 million within the period ended September 30, 2022, in comparison with $76.67 million within the period ended December 31, 2021.
NATR revenue is anticipated to extend barely year-on-year to $420.61 million in the present fiscal yr 2023. Its EPS is estimated to extend 280% year-on-year to $0.18 in 2023. Over the last month, the stock gained 26.9% to shut the last trading session at $10.56.
NATR’s strong foundations are reflected in its POWR rankings. An overall A rating for stocks is a powerful buy in our proprietary rating system. POWR rankings rate stocks on 118 various factors, each with its own weighting.
NATR is rated A for value and quality and B for stability and sentiment. In category B Medicine – consumer goods ranks first amongst nine corporations within the industry. click here for added POWR rankings for growth and momentum for NATR.
Abbott Laboratories (ABT)
ABT discovers, develops and sells healthcare products worldwide targeting cardiovascular, diabetes, diagnostics, neuromodulation, nutrition and medicine. Its products are sold on to wholesalers, distributors, government agencies, healthcare facilities, pharmacies and independent retailers.
On January 26, 2023, ABT announced that the FDA has approved the ProclaimTM XR spinal cord stimulation (SCS) device for the treatment of painful diabetic peripheral neuropathy (DPN), a devastating consequence of diabetes. The sale of this device is anticipated to extend ABT’s revenue margin.
ABT’s 12-month gross profit margin of 56.53% is 1.9% higher than the industry average of 55.48%. Its 12-month EBITDA margin of 27.58% is 640.2% higher than the industry average of three.73%.
ABT’s net sales increased barely year-on-year to $43.65 billion within the fiscal yr ending December 31, 2022. Sales of diagnostic products totaled $16.58 billion, up 6% year-over-year.
Street expects ABT revenue to grow 5.2% yoy to $42.12 billion in 2024. EPS is estimated to grow 9.9% yoy to $4.87 in 2024. It exceeded EPS estimates for all 4 consecutive quarters. Over the past three months, the stock has gained 11.7%, closing the last trading session at $110.55.
ABT has an overall B rating, similar to Buy in our POWR rating system.
It is rated B for value, stability, sentiment and quality. ABT ranks ninth out of 148 corporations within the rating Medicine – devices and equipment industry. click here to see additional POWR rankings for ABT (Growth and Momentum).
Humana Inc (NOISE)
HUM and its subsidiaries operate as a health and wellness company within the United States. It operates in three segments: Retail; Group and specialty; and the Health Service.
Future EV/HUM sales of 0.63x is 84.6% lower than the industry average of 4.11x. Its futures/ask price of 0.66x is 86% lower than the industry average of 4.71x.
Its 12-month EBITDA margin of 4.81% is 29.1% above the industry average of three.73% and its 12-month asset turnover ratio of 1.90% is 458.9% above the industry average industry at 0.34%.
HUM’s total revenue was $22.80 billion within the third quarter ended September 30, 2022, up 10.2% year-over-year. Premium revenue was $21.47 billion, up 8% year-on-year. Moreover, its operating income increased 86.6% year-on-year to $1.17 billion.
HUM’s revenue is anticipated to grow 9.7% year-on-year to $102.05 billion in fiscal 2023. Its EPS is estimated to extend 11.8% year-on-year to $28.01 in 2023. It surpassed EPS estimates in all the last 4 quarters. The stock gained 30.4% over the past yr to shut the last trading session at $511.70.
No wonder HUM has an overall A rating corresponding to a powerful buy in our POWR rating system.
It is rated B for growth, value and quality. It ranks third within the A rating Medicine – Health insurance industry. click here for added POWR rankings for stability, momentum, and moods for HUM.
Molina Healthcare, Inc. (MOH)
MOH offers managed healthcare services through Medicaid and Medicare programs and thru state insurance marketplaces. The company operates in 4 segments: Medicaid; medical care; Market; and other.
In terms of forward EV/Sales, MOH is trading at 0.50x, 87.8% lower than the industry average of 4.11x. The share price/sell forward ratio of 0.56 is 88.1% lower than the industry average of 4.71.
Its 12-month EBITDA margin of 4.76% is 27.6% higher than the industry average of three.73%. Moreover, the 12-month asset turnover ratio of two.54% is 643.9% higher than the industry average of 0.34%.
MOH’s total revenue was $7.93 billion within the third quarter ended September 30, 2022, up 12.6% year-over-year. Its net income was up 60.8% year-on-year to $230 million and EPS was $3.95, up 60.6% year-on-year.
The consensus estimate of revenue of $33.07 million for fiscal yr 2023 is up 4.5% year-over-year. Its EPS is anticipated to grow 10% year-on-year to $19.59 in 2023. It has exceeded EPS estimates in all 4 consecutive quarters. Over the past yr, the stock has gained 7.4%, closing the last trading session at $311.83.
The overall MOH A rating corresponds to a powerful buy in our POWR rating system.
It has a B for growth, value and quality. It ranks 4th in the identical industry. In addition to the above, we also rated MOH for Momentum, Stability, and Quality. Get all MOH rankings here.
McKesson Corporation (MCC)
MCK is a differentiated healthcare provider focused on improving the health outcomes of patients around the globe. The company operates in 4 segments: US Pharmaceutical; Prescription Technology Solutions (RxTS); medical-surgical solutions; and International.
In terms of forward EV/Sales, MCC is currently trading at 0.21x, which is 94.8% lower than the industry average of 4.11x. The forward price/sale multiple of 0.19 is 95.9% lower than the industry average of 4.71.
MCK’s EBIT margin of 1.20% is higher than the negative industry average of 1.76%. Its asset turnover ratio of 4.29% is well above the industry average of 0.34%.
MCC’s total revenue increased 5.4% year-on-year to $70.16 billion within the second quarter ended September 30, 2022. In addition, income from continuing operations was $932 million, up 249.1% year-on-year . In addition, EPS was $6.46, up 277.8% year-on-year.
Analysts expect MCC revenue to grow 4.6% year-on-year to $276.15 billion in current fiscal yr 2023. Its EPS is anticipated to extend 4.6% year-on-year to $24.79 in 2023 The stock has gained 47.5% over the past yr to shut the last trading session at $378.68.
POWR MCK’s rankings reflect promising prospects. The overall MCC A rating translates right into a Strong Buying rating in our POWR Ratings system.
It is rated A for height and B for value, stability and quality. It ranks first out of 79 stocks within the rating Medical services industry. To view additional POWR rankings for growth, sentiment and momentum for MCC, click here.
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NATR shares remained unchanged in Wednesday’s premarket trading. Year-to-date, NATR has gained 26.92%, in comparison with the S&P 500’s 6.29% gain over the identical period.
About the Author: Rashmi Kumari
Rashmi’s passion for capital markets, wealth management and financial regulation issues has led her to pursue a profession as an investment analyst. A Master of Commerce by education, he strives to make complex financial issues comprehensible to individual investors and help them make the correct investment decisions.
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