The health care stock market sector evolved from a leader to a laggard in the last 18 months. Health care stocks have a divergence right now: most stocks are underperformers, a minority show strength and are preparing a breakout, and there is a handful of stocks showing great leadership. We have chosen the 2 outperforming health care stocks in this article, both with great prospects in 2017 and beyond.
As the health sector tested long time support succesfully, it seems that the sector is either consolidating or preparing a rise. In both cases, sector leaders can be considered now as they are not suffering from sector pressure.
First, Boston Scientic Corp (symbol BSX), a large cap medical appliance and manufacturer, with a market cap of $34B, has a beautiful long term momentum chart.
Last week, BSX released financial results for the last quarter. On an annual basis, revenues rose from $7399M in 2015 to $8386M in 2016. Earnings Per Share rose from -0.18 in 2015 to 0.25 in 2016. The company has a stable profitability on rising revenues, that is a great mix. Gross margins widened from 61.68% in the last quartner to 71.09% compared to the same period last year, operating margins (EBITDA) are now 15.38% from 21.07%.
The company has a great outlook, a great chart and the health care sector could be stabilizing as well. BSX is a must-have in a diversified portfolio.
Second, CRH Medical (CRH.TO) is a small cap health care company that offers health care products and services with a specialization in anesthesia. It partners with physicians to create meaningful relationships and ensure a superior procedural experience.
CRH.TO trades on the TSE exchange. It has a market cap of 611.79M. Its PE ratio is 85, rather high but the company has growing revenues and earnings, which make it a rather acceptable stock for such a high PE ratio. The EPS is $0.93. The company has a total cash position of $10.53M. The short ratio is 7.82%, rather low given the fact it went up multifold in recent years. It proves the market still believes in growth.
CRH Medical completed 3 anesthesia acquisitions. Revenues from anesthesia services for the nine months ended September 30, 2016
were $44,813,732 compared to $25,166,336 for the nine months ended September 30, 2015.
The story is great, the growth prospects are great, it is a growing market in a growing market segment, the chart is beautiful. This is everything one needs for a calculated risk investment.