Traditionally, investors use price-to-earnings (P/E) to determine if a company’s stock price is over or undervalued by comparing it with peers or sector multiples. However, the ratio does not take into consideration of a key metric, growth. The relationship between the P/E ratio and earnings growth tells a more complete story than the P/E on its own.
Today we have shortlisted 8 U.S healthcare stocks with low PEG ratios (<1). Additionally, we note that these stocks are rated a ‘Buy’ by a majority of analysts according to consensus estimates provided by Bloomberg. Moreover, during the past one month, majority of these stocks have registered price gains with daily average trading volumes in excess of 100,000.
| Company Name |
Ticker |
Exchange |
Market Cap |
Last Price |
Average Volume |
Price Change |
TTM P/E |
PEG Ratio* |
Buy Rating |
|
Lannett Co Inc |
LCI |
NYSE |
2,007.2 |
56.25 |
752,420 |
27.8% |
21.3 |
0.19 |
66.7% |
|
Sucampo Pharmaceuticals Inc |
SCMP |
NASDAQ |
371.6 |
8.39 |
101,038 |
16.0% |
59.9 |
0.39 |
83.3% |
|
Anika Therapeutics Inc |
ANIK |
NASDAQ |
588.3 |
40.61 |
239,234 |
5.9% |
16.8 |
0.56 |
100.0% |
|
Acorda Therapeutics Inc |
ACOR |
NASDAQ |
1,451.9 |
34.78 |
1,066,290 |
1.8% |
61.6 |
0.73 |
50.0% |
|
Impax Laboratories Inc |
IPXL |
NASDAQ |
2,090.4 |
29.34 |
641,432 |
20.3% |
31.4 |
0.82 |
33.3% |
|
Amsurg Corp |
AMSG |
NASDAQ |
2,515.1 |
52.28 |
321,248 |
5.4% |
24.8 |
0.83 |
53.8% |
|
IPC The Hospitalist Co Inc |
IPCM |
NASDAQ |
720.8 |
41.85 |
215,046 |
-7.7% |
18.3 |
0.92 |
25.0% |
|
Kindred Healthcare Inc |
KND |
NYSE |
1,355.3 |
20.97 |
1,048,109 |
4.6% |
26.9 |
0.95 |
50.0% |
Source: Bloomberg
TTM: Trailing twelve months
*PEG Ratio: 2014 Estimated P/E to long term growth rate of earnings.
Company Description
Lannett Co Inc (NYSE: LCI)
Lannett Company, Inc. manufactures and distributes pharmaceutical products under its own trade name and under generic names. The Company also distributes competitive pharmaceutical products manufactured by other companies. The principal products include antifungals, antacids, dermatological preparations, and analgesic sedatives.
Sucampo Pharmaceuticals Inc (NASDAQ: SCMP)
Sucampo Pharmaceuticals, Inc. researches and develops drugs based on protones, which are derived from functional fatty acids. The Company produces a prescription drug for the treatment of chronic idiopathic constipation.
Anika Therapeutics Inc (NASDAQ: ANIK)
Anika Therapeutics, Inc. develops, manufactures, and commercializes therapeutic products and devices. The company’s products, based on hyaluronic acid, promote the repair, protection, and healing of bone, cartilage, and soft tissue. Anika’s products include ORTHOVISC and HYVISC which treat osteoarthritis.
Acorda Therapeutics Inc (NASDAQ: ACOR)
Acorda Therapeutics Inc. is a biotechnology company that is developing therapies for spinal cord injury and related neurological conditions, including multiple sclerosis. Additionally, Acorda is developing multiple approaches to regeneration and repair of the spinal cord and brain.
Impax Laboratories Inc (NASDAQ: IPXL)
Impax Laboratories, Inc. develops, manufactures, and markets both proprietary and multi-source pharmaceutical products utilizing its drug delivery technologies. The Company specializes in the development of niche and controlled release generics, as well as the development of branded products.
Amsurg Corp (NASDAQ: AMSG)
AmSurg Corporation develops, acquires, and manages physician practice-based ambulatory surgery centers and specialty physician networks. The company operates in partnership with surgical and other group physician practices.
IPC The Hospitalist Co Inc (NASDAQ: IPCM)
IPC The Hospitalist Co provides physician practice management solutions. The company’s services include staffed hospitalist programs and outsourced services.
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.
