The following are the top rated Healthcare stocks according to Validea's Low PE Investor model based on the published strategy of John Neff. This strategy looks for firms with persistent earnings growth that trade at a discount relative to their earnings growth and dividend yield.
AMERISOURCEBERGEN CORP. (ABC) is a large-cap value stock in the Biotechnology & Drugs industry. The rating according to our strategy based on John Neff is 98% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: AmerisourceBergen Corporation is a pharmaceutical sourcing and distribution services company. The Company's segments include Pharmaceutical Distribution and Other. The Company provides services to healthcare providers, and pharmaceutical and biotech manufacturers. As of June 30, 2016, the Pharmaceutical Distribution segment consists of two operating segments, including the operations of AmerisourceBergen Drug Corporation (ABDC) and AmerisourceBergen Specialty Group (ABSG), which distributes specialty drugs to their customers. Servicing healthcare providers in the pharmaceutical supply channel, the Pharmaceutical Distribution segment's operations provide drug distribution and related services. The Other segment consists of the operations of various segments, including the AmerisourceBergen Consulting Services (ABCS), the World Courier Group, Inc. and the MWI Veterinary Supply, Inc. ABSG operates distribution facilities that focus primarily on complex disease treatment regimens.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
| P/E RATIO: | PASS |
| EPS GROWTH: | PASS |
| FUTURE EPS GROWTH: | PASS |
| SALES GROWTH: | PASS |
| TOTAL RETURN/PE: | PASS |
| FREE CASH FLOW: | PASS |
| EPS PERSISTENCE: | FAIL |
Detailed Analysis of AMERISOURCEBERGEN CORP.
ALIGN TECHNOLOGY, INC. (ALGN) is a large-cap value stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on John Neff is 62% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Align Technology, Inc. designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners and computer-aided design/computer-aided manufacturing (CAD/CAM) digital services used in dentistry, orthodontics and dental records storage. The Company operates through two segments: Clear Aligner segment and Scanner and Services (Scanner) segment. The Clear Aligner segment consists of its Invisalign System, which includes Invisalign Full, Teen and Assist (Comprehensive Products), Express/Lite (Non-Comprehensive Products) and Vivera Retainers, along with its training and ancillary products for treating malocclusion (Non-Case). The Scanner segment consists of intra-oral scanning systems and other services available with the intra-oral scanners that provide digital alternatives to the traditional cast models. The Scanner segment includes its iTero scanner and OrthoCAD services.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
| P/E RATIO: | PASS |
| EPS GROWTH: | FAIL |
| FUTURE EPS GROWTH: | FAIL |
| SALES GROWTH: | PASS |
| TOTAL RETURN/PE: | PASS |
| FREE CASH FLOW: | PASS |
| EPS PERSISTENCE: | PASS |
Detailed Analysis of ALIGN TECHNOLOGY, INC.
DAVITA INC (DVA) is a large-cap value stock in the Healthcare Facilities industry. The rating according to our strategy based on John Neff is 62% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: DaVita Inc., formerly DaVita HealthCare Partners Inc., operates one division: DaVita Kidney Care (Kidney Care). The Kidney Care division consists of the Company's United States dialysis and related lab services, its ancillary services and strategic initiatives, including its international operations, and its corporate administrative support. The Company's segments include U.S. dialysis and related lab services and Other-Ancillary services and strategic initiatives. Its U.S. dialysis and related lab services line of business provide kidney dialysis services in the United States for patients suffering from chronic kidney failure, also known as an end-stage renal disease (ESRD). In addition, as of March 31, 2019, the Company operated or provided administrative services to 243 outpatient dialysis centers located in nine countries outside of the United States.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
| P/E RATIO: | PASS |
| EPS GROWTH: | PASS |
| FUTURE EPS GROWTH: | FAIL |
| SALES GROWTH: | FAIL |
| TOTAL RETURN/PE: | PASS |
| FREE CASH FLOW: | PASS |
| EPS PERSISTENCE: | PASS |
Detailed Analysis of DAVITA INC
GLAXOSMITHKLINE PLC (ADR) (GSK) is a large-cap growth stock in the Major Drugs industry. The rating according to our strategy based on John Neff is 62% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: GlaxoSmithKline PLC is a global healthcare company. The Company operates through two segments: Pharmaceuticals and Vaccines. The Company focuses on its research across six areas: Respiratory diseases, human immunodeficiency virus (HIV)/infectious diseases, Vaccines, Immuno-inflammation, Oncology and Rare diseases. The Company makes a range of prescription medicines and vaccines products. The Pharmaceuticals business discovers, develops and commercializes medicines to treat a range of acute and chronic diseases. The Vaccines business provides vaccines for people of all ages from babies and adolescents to adults and older people. It has a portfolio of medicines in respiratory and HIV. Its Pharmaceuticals business includes Respiratory, HIV, Specialty products, and Classic and Established products. Its Vaccines business has a portfolio of over 40 pediatric, adolescent, adult, older people and travel vaccines.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
| P/E RATIO: | PASS |
| EPS GROWTH: | FAIL |
| FUTURE EPS GROWTH: | FAIL |
| SALES GROWTH: | PASS |
| TOTAL RETURN/PE: | PASS |
| FREE CASH FLOW: | PASS |
| EPS PERSISTENCE: | PASS |
Detailed Analysis of GLAXOSMITHKLINE PLC (ADR)
RESMED INC. (RMD) is a large-cap growth stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on John Neff is 62% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: ResMed Inc. is a holding company. The Company is engaged in the development, manufacturing, distribution and marketing of medical devices and cloud-based software applications that diagnose, treat and manage respiratory disorders, including sleep disordered breathing (SDB), chronic obstructive pulmonary disease (COPD), neuromuscular disease and other diseases. The Company operates through two segments: Sleep and Respiratory Care segment, and the Software-as-a-Service (SaaS) segment. SDB includes obstructive sleep apnea (OSA) and other respiratory disorders that occur during sleep. Its cloud-based software digital health applications, along with its devices, are designed to provide connected care to improve patient outcomes. The Company's portfolio of products includes devices, diagnostic products, mask systems, headgear and other accessories, dental devices, portable oxygen concentrators (POCs) and cloud-based software informatics solutions.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
| P/E RATIO: | FAIL |
| EPS GROWTH: | PASS |
| FUTURE EPS GROWTH: | PASS |
| SALES GROWTH: | PASS |
| TOTAL RETURN/PE: | FAIL |
| FREE CASH FLOW: | PASS |
| EPS PERSISTENCE: | PASS |
Detailed Analysis of RESMED INC.
More details on Validea's John Neff strategy
About John Neff: While known as the manager with whom many top managers entrusted their own money, Neff was far from the smooth-talking, high-profile Wall Streeter you might expect. He was mild-mannered and low-key, and the same might be said of the Windsor Fund that he managed for more than three decades. In fact, Neff himself described the fund as "relatively prosaic, dull, [and] conservative." There was nothing dull about his results, however. From 1964 to 1995, Neff guided Windsor to a 13.7 percent average annual return, easily outpacing the S&P 500's 10.6 percent return during that time. That 3.1 percentage point difference is huge over time -- a $10,000 investment in Windsor (with dividends reinvested) at the start of Neff's tenure would have ended up as more than $564,000 by the time he retired, more than twice what the same investment in the S&P would have yielded (about $233,000). Considering the length of his tenure, that track record may be the best ever for a manager of such a large fund.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
