10 Health Care Stocks to Watch

NEW YORK (TheStreet) -- DepoMed (DEPO), Neoprobe (NEOP), Invacare (IVC), and Integra LifeSciences Holdings (IART) are among 10 health care stocks expected to report robust quarterly earnings, according to analysts polled by Bloomberg. Moreover, these stocks have upsides ranging from 3%-64%.


10. Almost Family ( AFAM) is a provider of home health services. The company has two operating segments: Visiting Nurse (VN) and Personal Care (PC). The Company is compensated for its services by Medicare (Visiting Nurse only), Medicaid, other third party payers (insurance companies) and private pay (paid by personal funds).

The company is expected to report its first quarter 2011 results on Apr. 28. Total revenue is forecast to increase 4.1% to $85.2 million from $81.8 million in the year-ago quarter. Net income is seen at $6.2 million or 67 cents per share, as compared to $7.4 million or 80 cents per share reported in the first quarter of 2010.

During March, the company acquired the assets of the Medicare-certified home health agency owned by Caregivers Health Network Inc. The terms of the transaction were not disclosed. However, the agency generated approximately $5 million in revenue in their last fiscal year.

Of the eight analysts covering the stock, 25% recommend it a buy, while the remaining rate it a hold. There are no sell ratings on the stock. On average, analysts expect an upside of 3% to $37.25 in value from current levels. Moreover, analysts at Zacks Investment Research upgraded the stock to neutral from underperform, while analysts at Collins Stewart initiated coverage with a hold rating and a price target of $38.

9. Integra LifeSciences Holdings ( IART) is an integrated medical device company. The products include implants, instruments and equipment for neurosurgery, orthopedic surgery and general surgery.

The company is scheduled to report its first quarter 2011 results on Apr. 28. Net income is projected to increase 22% to $18.5 million or 64 cents per share from $15.2 million or 50 cents per share in the comparable quarter of last year. Moreover, total revenue is seen rising 5% year-over-year to $180.9 million, according to analysts polled by Bloomberg.

Integra recently announced an instrument repair partnership with InstruMedics LLC, a national provider of service and repair for surgical instruments and equipment. The relationship will enable Integra's Surgical Instrument sales team to provide a comprehensive solution for managing the service and repair needs of surgical instruments, rigid endoscopes, flexible endoscopes, and powered surgical equipment. Also, Integra also received 510k approval from the U.S. FDA for three new spinal intervertebral body fusion devices (IBD).

Of the 20 analysts covering the stock, 45% recommend it a buy, while the remaining rate a hold. There are no sell ratings on the stock. On average, analysts expect an upside of 3.5% to $52.36 in value from current levels.

8. Natus Medical ( BABY) is a provider of health care products used for the screening, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and balance and mobility disorders..

The company is scheduled to report its first quarter 2011 results on Apr. 28. Net income is projected to come in at $3.4 million or 11 cents per share as opposed to a loss of $0.3 million or 1 cent per share in the comparable quarter of last year. Moreover, total revenue is expected to increase 17% year-over-year to $57.5 million, according to analysts polled by Bloomberg.

Of the eight analysts covering the stock, 63% recommend it a buy, while the remaining rate it a hold. There are no sell ratings on the stock. On average, analysts expect an upside of 5.7% to $17.67 in value from current levels. Moreover, analysts at Zacks Investment Research reiterated a neutral rating on the stock.

7. Abaxis ( ABAX) develops, manufactures, markets and sells portable blood analysis systems for use in any human or veterinary patient-care setting to provide clinicians with rapid blood constituent measurements. The company has two segments: the medical market and the veterinary market.

The company is expected to report its fourth quarter and full year 2011 results on Apr. 28. Total revenue is forecast to increase 8% to $36.4 million from $33.7 million in the year-ago quarter. Moreover, earnings are likely to surge 35% to $3.6 million or 16 cents per share from $2.6 million or 12 cents per share reported during fourth quarter 2010.

For full year 2011, earnings are forecast to increase 13.4% to $14.8 million or 65 cents per share on revenue of $142.8 million compared to $13 million or 58 cents per share on revenue of $124.6 million reported during 2010.

During Feb. 2011, the company announced a $2.8 million equity investment in Scandinavian Micro Biodevices APS (SMB), a privately-held developer and manufacturer of point-of-care diagnostic products for veterinary use.

Of the seven analysts covering the stock, 57% recommend it a buy, while the remaining rate a hold. There are no sell ratings on the stock. On average, analysts expect an upside of 6.3% to $30.8 in value from current levels. Analysts at Zacks Investment Research recently reiterated a neutral rating on the stock maintaining a price target of $30.

6. Invacare ( IVC) designs, manufactures and distributes a range of health care products for the non-acute care environment, including the home health care and extended care markets. The stock has gained 19% in the past one year.

The company will report its first quarter 2011 results on Apr. 28. Total revenue is projected to increase marginally to $404.5 million from $402.2 million in the year-ago quarter. However, net income is forecasted to more than double to $6.8 million or 25 cents per share from $3.1 million or 9 cents per share reported in the first quarter of 2010.

Invicare recently paid a cash dividend of $0.0125 per share on its common shares and $0.011364 per share on its Class B common shares. Also, the company revealed that for 2011 it expects organic sales growth of 2%-4%, adjusted EPS of $2.05-$2.15 and adjusted EBITDA of $145-$155 million.

Analysts at Zacks Investment Research reiterated a neutral rating on the shares. Of the five analysts covering the stock, 20% recommend it a buy, while the remaining rate a hold. There are no sell ratings on the stock. On average, analysts expect an upside of 6.4% to $34.5 in value from current levels.

5. ZOLL Medical ( ZOLL) develops and markets medical devices and software solutions that helps emergency care and save lives. The company provides a range of technologies, which help clinicians, emergency medical services (EMS) and fire professionals, and lay rescuers treat victims needing resuscitation and critical care. The stock has gained 71% during the past one year.

The company will report its second quarter 2011 results on Apr. 28. Total revenue is seen increasing 13% to $121 million from $107.1 million in the year-ago quarter. Moreover, net income is expected to rise 24% to $4.5 million or 21 cents per share from $3.7 million or 17 cents per share in the second quarter of 2010.

The company recently announced that its new Propaq MD Monitor/Defibrillator and Propaq M Monitor has received clearance from Health Canada to market and begin distribution to military customers and air medical operations in Canada. Also, the company recently bagged a contract from the Government of New South Wales (NSW) Australia to provide 5450 AED Plus devices for installation on all Rural Fire Service stations deployed throughout the State of NSW.

Of the 10 analysts covering the stock, 80% recommend it a buy, while the remaining rate a hold. There are no sell ratings on the stock. On average, analysts expect an upside of 10% to $52.25 in value from current levels.

4. CONMED ( CNMD) is a medical technology company with an emphasis on surgical devices and equipment for minimally invasive procedures and monitoring. The company's products serve the clinical areas of arthroscopy, powered surgical instruments, electrosurgery, patient care, endosurgery and endoscopic technologies.

The company is scheduled to report its first quarter 2011 results on Apr. 28. Net income is projected to surge to $23.6 million from $7.3 million in the comparable quarter of last year. On a per share basis, earnings are seen at 31 cents compared to 25 cents. Total revenue is forecasted to increase 2.8 to $181.3 million from $176.4 million, according to analysts polled by Bloomberg.

During Feb, the company announced that its CONMED Linvatec business unit launched five new medical devices in its Sports Medicine and Capital product lines. Furthermore, the company expects its 2011 revenue to be in the range of $745-$755 million, and earnings between $1.40 and $1.50 per share.

Of the six analysts covering the stock, 33% recommend it a buy, while the remaining rate a hold. There are no sell ratings on the stock. On average, analysts expect an upside of 18.7% to $33.5 in value from current levels.

3. Neoprobe ( NEOP) is a biomedical company that develops and commercializes oncology products. The company markets a range of medical devices, its neoprobe gamma detection systems (GDS). In addition to ITS medical device products, it has two radiopharmaceutical products, Lymphoseek and RIGScan CR, in advanced phases of clinical development.

The company is expected to report its first quarter 2011 results on Apr. 28. Total revenue is forecast to increase 10.4% to $2.9 million from $2.7 million in the year-ago quarter. Net loss is seen narrowing to $1.7 million or 2 cents per share, as compared to $2.5 million or 3 cents per share reported in the first quarter of 2010.

Recently, LifeSci Advisors LLC, a leading provider of investment research and investor relations services in the life sciences sector, initiated coverage on the stock. "Lymphoseek, Neoprobe's new small molecule radiopharmaceutical agent designed to detect lymph nodes during intraoperative lymphatic mapping procedures for patients with various forms of cancer, has the potential to become a 'best in class' imaging diagnostic," said Andrew I. McDonald, Ph.D., Managing Director at LifeSci Advisors.

Of the four analysts covering the stock, 75% recommend it a buy, while the remaining rate a hold. There are no sell ratings on the stock. On average, analysts expect an upside of 21.9% to $5.81 in value from current levels. The stock has gained 146% in the past one year.

2. DepoMed ( DEPO) is a specialty pharmaceutical company focused on the development and commercialization of differentiated products that are based on oral drug delivery technologies. It has developed two products, which have been approved by the FDA and are marketed.

The company is scheduled to report its first quarter 2011 results on Apr. 29 and expects net income of $44.3 million or 76 cents per share, as against a loss of $3.8 million or 7 cents per share in the comparable quarter of last year. Moreover, total revenue is expected to increase four-fold year-over-year to $64 million, according to analysts polled by Bloomberg.

The company recently announced that Boehringer Ingelheim has licensed worldwide rights to Depomed's Acuform gastric retentive drug delivery technology to develop and commercialize certain fixed dose combination product(s) which include extended release metformin and proprietary Boehringer Ingelheim compound(s) in development for type 2 diabetes.

"We are pleased to have closed our third licensing deal for our extended release metformin technology. The upfront and future milestone payments will strengthen our balance sheet, while the potential royalties will add to our revenue build-up as a specialty pharmaceutical company," said Carl A. Pelzel, president and chief executive officer of Depomed.

The stock has gained 136% during the past one year. Of the three analysts covering the stock, 33% recommend it a buy, while the remaining rate a hold. There are no sell ratings on the stock. On average, analysts expect an upside of 55% to $13.63 in value from current levels.

1. Neurocrine Biosciences ( NBIX) is engaged in developing, discovering and commercializing drugs for the treatment of neurological and endocrine-related diseases and disorders.

The company will report its first quarter 2011 results on Apr. 28. Total revenue is forecast to multiply several times to $12.2 million from $0.8 million in the year-ago quarter. Subsequently, net income is seen at $3 million or 5 cents per share as against a loss of $8.6 million or 19 cents per share reported in the first quarter of 2010.

The company recently concluded the preliminary assessment of the initial cohort of Tardive Dyskinesia patients using its proprietary Vesicular Monoamine Transporter 2 inhibitor (VMAT2), NBI-98854. Based on this data, the company is initiating the Investigational New Drug (IND) application process with the U.S. FDA.

Analysts at Jefferies reiterated a buy rating, while Piper Jaffray maintained an overweight rating on the stock. Of the seven analysts covering the stock, 57% recommend it a buy, while the remaining rate it a hold. There are no sell ratings on the stock. On average, analysts expect an upside of 64% to $12.5 in value from current levels.

>>To see these stocks in action, visit the 10 Health Care Stocks to Watch portfolio on Stockpickr.

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