An aging population, health care reform, proposed caps on drug prices, and small companies seeking blockbuster drugs. All of these characterize the health care sector, which can make investing in health care a full contact sport.
Let’s take a look at three microcaps that are performing well in the choppy health care market. While investing in these three stocks may not have quite the effect of Ambien, perhaps they will soothe your portfolio angst just a bit.
Investors in Avid Bioservices, Inc. (NASDAQ: CDMO) don’t have to worry about finding the next blockbuster drug. Avid decided to change gears last year from a drug company, to a dedicated CDMO (contract development and manufacturing organization).
Avid not only pivoted on it’s business model, but also on its name. Avid was known as Peregrine Pharmaceuticals until January of this year.
The business model change (Peregrine had done some CDMO work previously) threw a wrench into the company’s stock. But, as the new model has taken hold, the stock has recovered since February. It now looks to be relishing the new picks-and-shovels model. With earnings expected to grow over 75% next year, investors should consider the new model before Wall Street fully values the company as a CDMO.
Speaking of getting older, who doesn’t want a good chiropacter on call. The Joint Corporation (NASDAQ: JYNT) has brought a fresh face to the chiropractic practice.
The Joint has membership plans and a no appointment necessary policy at their over 400 clinics in 30 states. Offices have a non-clinical atmosphere, and they provide individualized plans for chiropractic health.
This new approach has put the stock on a solidly upward march in 2018, with earnings growth of over 103% this year. All-time highs of just over $12 may be within striking distance.
If you need more than chiropractic care, look no further than SeaSpine Holdings Corporation (NASDAQ: SPNE). SeaSpine provides a wide range of products to orthopedic surgeons to address spinal injuries and disorders.
Though still not profitable, the company has been slowly decreasing earnings losses the past few years. The stock has been stair-stepping higher this year, and has risen to new highs after every pullback.
Earnings are expected to grow over 22% next year, and if management continues the turnaround, the stock could be in for more moves to the upside.
These 3 health care stocks, Avid Bioservices, The Joint Corporation, and SeaSpine Holdings, offer investors solid business models and an opportunity for good returns in health care. Rest easy with management teams at these companies performing to plan.
Disclaimer: The author and Spotlight Growth has no positions in any of the stocks mentioned in this article. Nor does either party currently have any relationship, or any other conflicts of interest, with any of the companies mentioned in this article. This content is meant for informational and entertainment purposes only and should not be meant as a recommendation to buy or sell any securities. Please visit a licensed financial representative to determine what investments are right for you.
Article By: Steven Adams
