Amid a rebirth of Covid cases across nearly all states with new restrictions on international study and international travel, healthcare stocks in new demand. Check out my weekly picks!
Castlight Health Inc. (CSLT)
I’m excited about this undervalued stock. I previously mentioned that it had potential and, in a somewhat vindicating move of the market, as of 07/13, shares have increased 5.95%. Three weeks ago, Castlight came out with a new solution to accommodate colleges and universities opening in the fall of 2020. This SaaS solution is designed to ease the transition into in person classes with a focus on symptom reporting and tracking, two methods successfully linked to curbing coronavirus cases. Now consider that less than a week ago, ICE imposed strict restrictions on international students which will facilitate the premature reopening of college campuses in order to accommodate foreign students who wish to remain in school, an essential flow of revenue at public and private schools. While this is an extremely shortsighted decision for a multitude of reasons, Castlight’s recent focus on safe reopening based solution scenarios for schools and businesses in the wake of the corona pandemic make it an underappreciated provider of software solutions aimed to safely navigate through what is sure to be a making the best of the worst situation come fall.
With shelter at home orders seeing a resurgence amid the rapid rise of coronavirus cases in most states, I believe that Anthem is undervalued. Let’s break this down. First, over the past 12 months, Anthem has averaged a P/B (for us, the plebeians, this is Price to Book) of 2.21 in comparison to the industry average of 3.75. That’s impressive, considering. More impressively, it’s trading with a P/E of 64% of the industry average. In fact, though I consider the range of services and the tendency towards remote solutions at Anthem attractive in the current coronavirus landscape, it recently decreased in stock price about 13% by end of June. I believe it’s trading under what it’s valued and with a company-wide focus on advancing in house pharmaceutical and primary care capabilities, among other offerings, especially in comparison to competitors, it is especially attractive.
Illumina, Inc (ILMN)
You may have heard of Illumnia, a company that focuses on the gene sequencer market. While this stock nose dived to a low of $209 USD in March, it’s now trading at about $370 USD. Still, in the coronavirus landscape and with the race of companies for a vaccine, I believe it’s extremely well positioned. Due to climate demand, the FDA has allowed emergency use generation sequencing testing when related to providing potential coronavirus cures, better positioning Illumnia to continue with product development they otherwise would have experienced roadblocks in. Moreover, as the country prematurely opens and the need for coronavirus vaccines rises with the death toll, companies well positioned to help will also increase in value. With the average timeline of the creation of a successful vaccine at, in the most positive scenario, 18 months, Illumnia, who recently acquired a genomics analytics company and who is uniquely positioned in the current market with a stronghold over its market share, has a potential for real growth.
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