Markets have remained bearish over the past week, with the double whammy of lingering inflation and federal interest rate hikes. However, the healthcare sector is expected to continue thriving amid surging healthcare concerns due to an aging population and the resurgence of COVID-19 cases. The Health Resources and Services Administration recently announced several health-sector reforms and budget allotments.
Furthermore, the demand for the digital healthcare industry is also soaring owing to its convenience and rapid medical advancements. According to Grand View Research, the global digital health market is projected to grow at a 27.7% CAGR from 2022 to 2030.
So, we think it could be wise to scoop up the stocks of fundamentally strong healthcare companies Bausch Health Companies Inc. (BHC), Teleflex Incorporated (TFX), Abcam plc (ABCM), and Integra LifeSciences Holdings Corporation (IART), which are currently trading near their 52-week lows. These stocks are rated Buy in our proprietary POWR Ratings system.
Click here to checkout our Healthcare Sector Report for 2022
Bausch Health Companies Inc. (BHC)
Headquartered in Laval, Canada, BHC develops, manufactures, and markets a range of pharmaceutical, medical device, and over-the-counter products primarily in the therapeutic areas of eye health, gastroenterology, and dermatology. It has five segments: Bausch + Lomb; Salix; International Rx; Ortho Dermatologics; and Diversified Products.
On February 23, 2022, BHC’s chairman and CEO Joseph C. Papa said, “We have made great progress in our efforts to unlock value by creating three great companies, including publicly filing the registration statements for the proposed IPOs of Bausch + Lomb and Solta. Our planning and preparations to launch these IPOs are substantially complete, and we are prepared to move forward, subject to market conditions, stock exchange and other approvals.”
For its fourth quarter, ended Dec. 31, 2021, BHC’s operating income came in at $367 million, compared to a $5 million loss in the previous period. Its net income was $72 million, compared to a $152 million loss in the year-ago period. Also, its EBITDA was $723 million, up 76.3% year-over-year.
Analysts expect BHC’s revenue to be $11.36 billion in 2023, representing a 3.5% year-over-year increase. The company’s EPS is expected to rise 14.8% to $1.40 for the quarter ended June 30, 2022. The stock closed Friday’s trading session at $16.04 after hitting its 52-week low of $15.86.
BHC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
BHC has an A grade for Value and a B grade for Growth. It is ranked #31 out of 166 stocks within the Medical - Pharmaceuticals industry. Click here to see the additional POWR Ratings for Momentum, Stability, Sentiment, and Quality for BHC.
Teleflex Incorporated (TFX)
TFX in Wayne, Pa., designs, develops, manufactures, and supplies single-use medical devices for common diagnostic and therapeutic procedures in critical care and surgical applications worldwide. It provides vascular access products; interventional products; anesthesia products; interventional urology products; respiratory products; and urology products.
On April 28, 2022, Liam Kelly, Chairman, President, and CEO, said, “Teleflex delivered solid first-quarter results reflecting strong execution, the benefits of our diversified product portfolio, and the dedication of our global team to serving our customers.”
TFX’s net revenues were $641.72 million for the first quarter, ended March 27, 2022, compared to $633.92 million in the prior-year period. Its net income was $77.14 million, up 3% year-over-year, while its EPS came in at $1.63, up 3.2% year-over-year.
Analysts expect TFX’s revenue to increase 6.1% year-over-year to $3.07 billion in 2023. Its EPS is estimated to grow 11% per annum over the next five years. It also surpassed EPS estimates in each of the trailing four quarters. The stock closed Friday’s trading session at $269.61 after hitting its 52-week low of $268.29.
TFX has an overall B rating, which indicates a Buy in our proprietary rating system. It also has a B grade for Growth.
Within the Medical - Devices & Equipment industry, it is ranked #27 out of 157 stocks. Click here to see the additional POWR Ratings for Value, Momentum, Stability, Sentiment, and Quality for TFX.
Abcam plc (ABCM)
Headquartered in Cambridge, U.K., ABCM, a life science company that focuses on identifying, developing, and distributing reagents and tools for scientific research, diagnostics, and drug discovery.
On April 27, 2022, ABCM officially launched its newest regional hub in Singapore. This is expected to significantly expand the company’s business horizons in the Asia-Pacific life sciences community.
ABCM’s revenue for the 12 months ended Dec. 31, 2021, came in at £315.40 million ($387.07 million), up 17.1% year-over-year. Its adjusted operating profit was £60.40 million ($74.13 million), up 19.4% year-over-year. Furthermore, its adjusted profit for the financial period came in at £47.20 million ($57.93 million), up 22.3% year-over-year.
For its fiscal period ending Dec. 31, 2022, analysts expect ABCM’s revenue to increase 16.1% year-over-year to $475.93 million. Its EPS is estimated to increase 104.9% year-over-year to $0.39 for the same period. The stock closed Friday’s trading session at $13.84, marginally above its 52-week low of $13.76.
ABCM’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system.
It has a B grade for Stability. Within the Medical - Services industry, it is ranked #24 of 84 stocks. Click here to see the additional POWR Ratings for Growth, Value, Momentum, Sentiment, and Quality for ABCM.
Integra LifeSciences Holdings Corporation (IART)
IART in Plainsboro, N.J., develops, manufactures, and markets surgical implants and medical instruments for neurosurgery, extremity reconstruction, and general surgery. It operates in two segments: Codman Specialty Surgical and Tissue Technologies.
On April 27, 2022, Jan De Witte, IART’s president, and CEO, said, “With global procedure volumes improving in March, our strong execution enabled us to deliver better-than-expected first quarter revenue with organic growth exceeding five percent.”
IART’s net total revenues came in at $376.64 million for the first quarter ended March 31, 2022, up 4.6% year-over-year. Its operating income came in at $46.16 million, up 50.3% year-over-year. In addition, its adjusted EBITDA came in at $93.55 million, up 4.1% year-over-year.
IART’s revenue is expected to increase 5.4% to $1.68 billion in 2023. Its EPS is estimated to increase 12.4% per annum for the next five years. It surpassed EPS estimates in each of the trailing four quarters. The stock closed Friday’s session at $59.12 after hitting its 52-week low of $58.28.
IART has an overall B rating, which equates to Buy in our proprietary rating system. It has a B grade for Growth, Value, and Stability. Click here to check additional ratings for IART (Momentum, Sentiment, and Quality). It is ranked #20 of 157 stocks in the Medical - Devices & Equipment industry.
Click here to checkout our Healthcare Sector Report for 2022
BHC shares were trading at $13.56 per share on Monday afternoon, down $2.48 (-15.46%). Year-to-date, BHC has declined -50.89%, versus a -15.23% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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