11 U.S. HealthCare Stocks with Low P/CF: Investment Idea of the Day

Published:

In order to measure the good health (liquidity and solvency) of a company, how much cash has been generated by the company needs to be analysed. Price/cash flow (P/CF) ratio is a measure of the market’s expectations of a firm’s future financial health. The ratio is considered more reliable than the price/earnings (P/E) ratio to evaluate a company, as cash flow is not easily manipulated unlike earnings which could be easily manipulated through depreciation and other non-cash factors.

Today we have shortlisted 11 U.S. healthcare stocks that have recorded low P/CF ratios in their latest reported quarter. Additionally, most analysts covering these stocks recommend a Buy with 12-month price targets indicating decent upside potential from current levels. During the past 1-month, few of these stocks have registered gains with average trading volumes above 100,000.

Company Name

Exchange

Ticker

Market Cap
($ MM)

Last Price

1-Month Average Volume

1-Month Price Change

Price to Cash Flow Ratio*

Total Analyst Coverage

Buy Rating

Upside

OncoMed Pharmaceuticals

NASDAQ

OMED

544.0

18.28

205,236

2%

6.41

6

100%

136%

Symmetry Medical Inc

NYSE

SMA

343.2

9.14

517,825

-2%

7.32

4

75%

29%

Select Medical Holdings Corp

NYSE

SEM

1,755.3

13.50

888,643

-3%

10.04

10

30%

25%

Merit Medical Systems Inc

NASDAQ

MMSI

535.2

12.38

168,412

-2%

11.30

7

71%

26%

Medicines Co/The

NASDAQ

MDCO

1,684.9

25.87

524,548

6%

12.55

12

50%

24%

Five Star Quality Care Inc

NYSE

FVE

213.9

4.40

130,009

-3%

13.01

5

40%

59%

Hyperion Therapeutics Inc

NASDAQ

HPTX

539.0

26.17

122,780

11%

14.98

7

100%

47%

Capital Senior Living Corp

NYSE

CSU

628.2

21.62

135,346

-5%

15.39

8

88%

37%

HMS Holdings Corp

NASDAQ

HMSY

1,813.3

20.67

1,149,375

4%

15.86

12

75%

21%

Emergent Biosolutions Inc

NYSE

EBS

844.4

22.53

216,215

-2%

16.15

4

100%

44%

Kindred Healthcare Inc

NYSE

KND

1,338.5

20.71

775,997

7%

16.80

12

33%

35%

Source: Bloomberg
*As of latest reported quarter

Company Description:

OncoMed Pharmaceuticals Inc (NASDAQ: OMED)
OncoMed Pharmaceuticals, Inc. provides biotechnology research and development. The company synthesizes oncogenic mutations in stem cells that allow the cells to grow without normal limitations in attempts to exploit therapies that selectively target tumor initiating cells. OncoMed Pharmaceuticals serves the healthcare industry and cancer therapy patients in the United States.

Symmetry Medical Inc (NYSE: SMA)
Symmetry Medical Inc. designs, develops, and manufactures custom and standard surgical instruments. The company markets the products to dental, osteobiologic and endoscopy sectors. Symmetry provides limited specialized products and services to non-healthcare markets, such as the aerospace market.

Select Medical Holdings Corp (NYSE: SEM)
Select Medical Holdings Corporation is an operator of specialty hospitals and outpatient rehabilitation clinics. The company provides medical rehabilitation services on a contract basis at nursing homes, hospitals, assisted living and senior care centers, schools and work sites.

Merit Medical Systems Inc (NASDAQ: MMSI)
Merit Medical Systems, Inc. manufactures and markets products used in diagnostic and interventional cardiology and radiology procedures. The company’s primary products include inflation devices, guide wires, thrombolytic catheters and fluid dispensing systems, and angiography accessories, among others. Merit’s products are sold worldwide.

Medicines Co (NASDAQ: MDCO)
The Medicines Company develops products that improve specialized care. The company markets Angiomax, an anticoagulant approved in the United States and other countries for use in patients undergoing coronary angioplasty procedures.

Five Star Quality Care Inc (NYSE:FVE)
Five Star Quality Care, Inc. leases and operates senior living facilities, including facilities owned by Senior Housing Properties Trust. The company’s facilities contain nursing home beds and independent and assisted living units.

Hyperion Therapeutics Inc (NASDAQ: HPTX)
Hyperion Therapeutics Inc. operates as a biopharmaceutical company. The company develops therapeutics to treat disorders in the areas of orphan diseases and hepatology. Hyperion Therapeutics offers its services throughout the United States.

Capital Senior Living Corp (NYSE:CSU)
Capital Senior Living Corporation develops and operates senior living communities in the United States. The company provides services such as independent living, assisted living, skilled nursing, and home care services to the elderly at its communities.

HMS Holdings Corp (NASDAQ: HMSY)
HMS Holdings Corporation provides proprietary information management and data processing products and services. The company furnishes these products to hospitals and health care providers, government health service agencies, payers or purchasers of health care, and companies serving the health care industry.

Emergent Biosolutions Inc (NYSE: EBS)
Emergent Biosolutions, Inc. develops and produces immunobiotics, pharmaceutical products that assist the body’s immune system to prevent or treat disease. The company produces a vaccine for anthrax.

Kindred Healthcare Inc (NYSE: KND)
Kindred Healthcare, Inc. provides a range of healthcare services. The company operates hospitals, nursing centers, institutional pharmacies, and contracts rehabilitation services. Kindred healthcare conducts business throughout the United States.

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