The first half of 2015 has not been great for the U.S. stock market in general. As we enter the second half, the market is going crazier. The Greek crisis, Chinese doldrums, oil price slide and the speculations related to the Fed rate hike have added to the volatility this week.
Meanwhile, a recovering U.S. economy driven by rising business and consumer confidence and improving job market scenario are expected to drive investor confidence in the second half of 2015. Moreover, expectations of a booming retail sector and better GDP numbers drive further optimism. These improving trends bode well for the Medical sector as well.
However, we note that an improving U.S. economy that resulted in the strengthening of the U.S. dollar, affected top-line growth of a number of medical companies in the first half of 2015. The second half results are also expected to be impacted by the instability in the foreign exchange rates.
Nevertheless, there were a few stocks which outperformed the market during the same period. However, there were some major companies that performed below expectations, Baxter International Inc (NYSE:BAX) being one.
This Zacks Rank #5 (Strong Sell) stock recently separated its biopharmaceuticals business into a new company Baxalta. However, the move did not positively impact the stock price, which was down 8.1% on a year-to-date basis. The company’s senior unsecured ratings were downgraded by credit rating agency Moody’s, citing Baxter’s small, less diverse, lower margin business and higher leverage as compared to Baxalta.
Top Medical Picks
With the help of our new style score system, we have identified three stocks that look great from the Growth perspective. Our Growth Style Score condenses the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
Back-tested results show that stocks with Growth Style Scores of ‘A’ or ‘B,’ when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) handily outperform other stocks.
These three picks flaunt a solid Zacks Rank coupled with an impressive Growth Style Score of ‘B.’
AMAG Pharmaceuticals Inc (NASDAQ:AMAG) – Waltham, MA-based AMAG is a specialty pharmaceutical company with a focus on maternal health, anemia and cancer supportive care.
AMAG currently carries a Zacks Rank #1 and has returned approximately 61% on a year-to-date basis. Further, the stock has seen its current year estimates surge 17.28% over the last 30 days to $3.62.
Rockwell Medical Inc (NASDAQ:RMTI) – Rockwell Medical manufactures hemodialysis concentrates and dialysis kits, and sells, distributes and delivers such concentrates and dialysis kits, as well as other ancillary hemodialysis products to hemodialysis providers in the US.
Rockwell currently sports a Zacks Rank #1 and has returned approximately 58.6% on a year-to-date basis. Further, the stock has seen its current year estimates scaled 13.89% over the last 30 days to a narrower loss of 8 cents.
Synergetics USA Inc (NASDAQ:SURG) - O’Fallon, MO-based Synergetics supplies precision surgical devices that targets ophthalmology and neurosurgery markets.
Synergetics currently carries a Zacks Rank #1 and has returned approximately 8.1% year-to-date. The company has a projected EPS growth rate of almost 15%. Further, the stock has seen its current year estimates rise 33.33% over the last 30 days to 16 cents.