Healthcare is a hot sector. As a matter of fact, it has been for years. While changes in health care laws have put this space in focus, demographic trends, specifically with aging baby bombers, have kept the space in the limelight. And should these trends continue, we could see more money continuing to flow to this important sector of the economy.
One especially scorching space within the health sector which we will zoom in on is the medical services industry, which as seen a lot of positive activity as of late. For starters, the percent of positive earnings revisions the space has experienced is up 22%. Furthermore, the medical services industry has gone up 27 industry ranks, now sitting among the top 18% of all industries.
We have found 3 stocks within the sector which appear set to outperform the overall medical services industry, and have favorable growth and valuation ratios too. What is particularly attractive about these stocks which sets them apart from the industry are the exceptional earnings statistics. Now, let’s inspect and analyze these 3 stocks and the key factors which set them up to outperform within this thriving industry.
AMN Healthcare Services Inc-AHS
AMN Healthcare Services recruits and puts healthcare professionals in travel or permanent assignments in healthcare facilities abroad. (NYSE:AHS) is currently a Zacks Rank #1 (Strong Buy). The year over year growth estimate for the current quarter is 26.56%.
There have been analysts posting estimate revisions on the stock, with 4 positive revisions being posted in the past 60 days. Thanks to the estimate revisions, our consensus estimate has seen some movement, moving from an EPS consensus of $0.18 thirty days ago to a current consensus of $0.20. AHS has been impressive, beating our EPS consensus estimate in each of the last 4 quarters, and by an average of 12%.
When comparing the company to the medical services industry, it exceeds in a number of statistics that are critical for achieving success. For example, the trailing twelve month ROE is 14.83%, while the industry lags behind at 11.56%. AHS has a nice debt to equity ratio of 0.53, while the medical services industry’s is 35.84 as a whole. AMN Healthcare posts its earnings on 5/7/15.
Healthways is the largest provider of health and care support programs and services. It operates in the USA, Puerto Rico, and Guam. (NASDAQ: HWAY) is a Zacks Rank #2 (Buy). The Zacks Rank serves as a catalyst for the positive Earnings ESP of 33.33%, making it a likely candidate to surprise when it reports its earnings on 4/23/15. The company surprised when it beat our consensus EPS estimate by 31.58%.
The year over year growth for the current quarter is 57.14%, and the same stat for the next quarter is 514.29%. This fiscal year’s growth rate is 47.2%, while the industry’s is 24.3%. HWAY has a price to cash flow ratio of 11 for the most recent fiscal year, while the industry’s is 15.12. Healthways has a debt to equity ratio of 0.76 for the most recent quarter, while the industry’s is 35.84.
ICON outsources development services to the pharmaceutical, biotechnology, and medical device industries. (NASDAQ: ICLR) is a Zacks Rank #1 (Strong Buy), up from a Zacks Rank #2 just a week ago. This company also has a positive Earnings ESP of 1.25%, making it a likely candidate to beat our estimate consensus when it reports its earnings on 4/23/15.
The year over year growth estimate for the current quarter for ICON is 39.71%. There have been 20 positive estimate revisions made by analysts for the current quarter. As a result, there has been movement in our consensus estimate, moving up from $0.76 seven days ago, to $0.80 now. ICLR has posted beats on our consensus estimate in each of the last four quarters, by an average of 12.9%.
The company exceeds the industry in a number of margins. The most notable includes ICON’s trailing twelve month net profit margin of 12.06%, while the industry’s is only 3.78%. The trailing twelve month ROE is 18.31%, while the industry as a whole averages 11.56%.
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