For Immediate Release
Chicago, IL – October 19, 2017 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: (https://www.zacks.com/stock/news/279133/where-to-find-value-in-healthcare-stocks)
Where to Find Value in Healthcare Stocks
Welcome to Episode #103 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Zacks Senior Strategist Kevin Cook who is also the editor of Zacks Healthcare Innovator portfolio. It holds about 30 healthcare and medical stocks for the long term.
Tracey has been getting questions from listeners wondering if there is any value in healthcare stocks right now. Are any of them cheap?
Biotechs on Fire
The biotechs are hot again. The S&P Biotech ETF has soared 47% this year while the iShares NASDAQ Biotechnology ETF has gained 27%.
But can some value still be found in the biotechs? And what about all the other healthcare industries?
Zacks’ Medical Sector has over 800 companies, including drug companies, hospitals, managed care insurers, medical device companies, dental companies and others. They’re not all created equal.
Tracey and Kevin ran a screen to quickly find basic value stocks within the sector. They looked only in the Medical sector and chose a current year forward P/E less than 20 and a next year forward P/E of under 15.
They didn’t screen for Zacks Rank.
It returned 61 stocks.
Tracey and Kevin discuss about a dozen of them on this week’s podcast including these 5 big names.
5 Cheap Healthcare Stocks
1. Gilead (Nasdaq:GILD – Free Report) has been cheap for years. It trades with a forward P/E of just 9.1. But earnings are on the decline. The company made $11.57 last year and expects to just make $8.74 this year. It recently bought KITE but will that be enough to give earnings a boost? Or is it a value trap?
2. Biogen (Nasdaq:BIIB – Free Report) is another big biotech that is cheap. It trades with a forward P/E of just 15.6. Two analysts just raised their price targets to over $400 on the stock. Unlike Gilead, it’s expected to see earnings growth this year and next year.
3. Teva (NYSE:TEVA – Free Report) is the cheapest in the group. It trades with a forward P/E of 3.4 but investors have to be concerned about those falling earnings estimates. It made $5.14 in 2016 and is expected to make just $3.82 in 2018. Is it a value trap?
4. AbbVie (NYSE:ABBV – Free Report) has the rare combination of an attractive P/E at just 16.4 and rising earnings estimates. Earnings are expected to jump 14% in 2017 and another 19% in 2018. Should ABBV be on your short list?
5. Aetna (NYSE:AET – Free Report) is in the managed care group, which, is one of the most difficult areas to be in right now due to Obamacare uncertainty. But Aetna has been reducing its exposure to the exchanges and it trades with a forward P/E of just 15.9.
There are other industries that are also in the cone of uncertainty due to the unknowns surrounding Obamacare, including the hospitals.
Tracey Ryniec manages the Insider Trader and Value Investor portfolios at Zacks.com. She hosts 2 weekly podcasts: Zacks Market Edge Podcast and the Value Investor Podcast. You can also catch her on Twitter at @TraceyRyniec.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Get the full Report on GILD - FREE
Get the full Report on BIIB - FREE
Get the full Report on TEVA - FREE
Get the full Report on ABBV - FREE
Get the full Report on AET - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report
Biogen Inc. (BIIB) : Free Stock Analysis Report
Teva Pharmaceutical Industries Limited (TEVA) : Free Stock Analysis Report
Aetna Inc. (AET) : Free Stock Analysis Report
To read this article on Zacks.com click here.