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The Zacks Analyst Blog Highlights: Aetna, CareDx, PRA Health Sciences and Diplomat Pharmacy


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For Immediate Release

Chicago, IL - Dec 7, 2017 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include  Aetna Inc. AET , CareDx Inc. CDNA , PRA Health Sciences, Inc. PRAH and Diplomat Pharmacy, Inc. DPLO .

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Wednesday's Analyst Blog:

4 Attractive Stocks in an Evolving Healthcare Space

The healthcare sector has been under the spotlight for quite some time for a host of reasons -regulatory uncertainty, increasing consumerism and consolidation being the most prominent.

The recent deal of merger between two of the industry stalwarts Aetna Inc. and CVS Health, once again points to increased activity in healthcare. The deal also testifies to the trend of joining two branches of the industry, in this case health insurance and pharmacy benefit management, to achieving diversification and economies of scale for affordable and convenient care.

Increasing Consolidation in Healthcare

Changing demographics, increasing regulatory restrictions, growing consumerism, need to control cost and attain speedier growth have necessitated unprecedented mergers and acquisitions in all subsectors of healthcare like hospitals, insurance and pharmaceutical.

The changing nature of the healthcare industry has encouraged companies to spread their operations so as to provide a bouquet of products and services and save cost at each touchpoint. The recent deal between Aetna and CVS Health is an excellent example of this. It qualifies as vertical integration, which would enable the surviving company to sell a range of services and products from drug to insurance cover.

A similar deal was made in 2015, when another insurance major UnitedHealth Group acquired Catamaran, a pharmacy benefit management company. The acquisition has proved highly accretive to UnitedHealth Group and contributed meaningfully to its results.

Changing demographics, which has resulted in an increase in the baby boomer population, which has fueled demand for Government programs such as Medicare and Medicaid, has also led to a number of mega mergers in the industry in recent years. The failed mergers of Anthem Inc. with Cigna Corp. and Humana Inc. with Aetna Inc. also belonged to this bracket.

Who Is the Real Gainer?

Increasing consolidation has led to a reduction in the number of players, greater market concentration and reduced competition, and increasing barriers of entry in the industry.

Though there's a bit of ambiguity as to whether increasing consolidation has brought about welfare (in real terms) for consumers. However, the companies certainly stand to benefit from their increased size, putting them in a powerful position to negotiate with suppliers and consumers.

U.S. healthcare is a highly sensitive issue that has been gaining huge attention. Healthcare expenditure has been on the rise and though ways are being devised to control costs, a reversal in trend seems difficult to achieve. Companies in this space are thus set to thrive given continued demand for better healthcare needs.

Attractive Stocks to Pick

We therefore point out some stocks in the space that carry a strong Zacks Rank #2 (Buy) and have outperformed the industry 's decline of 0.6% so far this year. Adding these stocks to an investment portfolio will fetch smart returns.

CareDx Inc. develops, markets and delivers a diagnostic surveillance solutions for heart transplant recipients. So far this year, the stock has returned a staggering 140.4%. The long-term expected earnings growth rate for the company is 20%. It carries a Growth Style Score of B and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

PRA Health Sciences, Inc. operates as a global contract research organization, providing outsourced clinical development services to the biotechnology and pharmaceutical industries. It carries a Growth Style Score of B and a Zacks Rank #2. This year, the stock has rallied 47%. The long-term expected earnings growth rate for the company is 18%.

Diplomat Pharmacy, Inc. operates as an independent specialty pharmacy in the United States. It aids in the dispensing, delivery, dosing and reimbursement of clinically intensive and specialty drugs. It carries a Growth Style Score of A and a Zacks Rank #2. This year, the stock has returned 45%. The long-term expected earnings growth rate for the company is 6.7%.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free .

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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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

Aetna Inc. (AET): Free Stock Analysis Report

Diplomat Pharmacy, Inc. (DPLO): Free Stock Analysis Report

PRA Health Sciences, Inc. (PRAH): Free Stock Analysis Report

CareDx, Inc. (CDNA): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks
Referenced Symbols: AET , DPLO , PRAH , CDNA


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