Hedge Funds Are Buying 8 Rallying Healthcare Stocks Benefitting From Obamacare

Emily Smykal, Kapitall: The GOP may not be happy about it, but healthcare sure is – we found stocks benefitting from Obamacare. 

So Congress is still dealing with the federal budget, the debt ceiling debate, even a few misplaced phone calls. But the Affordable Care Act, also known as Obamacare, is continuing to march steadily onward.

[Read more on Healthcare from Kapitall: 6 Cash-Rich Healthcare Stocks that Look Undervalued]

Despite some glitches in the system, and overwhelming demand, President Obama's signature piece of legislation is bringing healthcare to millions of Americans across the country. And the healthcare sector is watching.

We already told you about some healthcare stocks that have been performing well despite the government shutdown, but now that Obamacare has had a few weeks to get on it's feet, how is the industry responding?

Investing ideas

We decided to screen the healthcare sector for rallying stocks, which can trigger positive sentiments. Specifically we ran a screen for stocks that are rallying above their 20-day, 50-day, and 200-day moving averages (MA), indicating that these stocks have strong upward momentum.

Next we limited our results to those healthcare stocks with  5-year projected earnings-per-share growth at 20% and above, a signal that investors see strong long-term growth potential. 

For further confidence in our list, we turned to hedge funds (with a grain of salt of course). We screened these stocks for those experiencing significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these stocks to outperform in the future.

We were left with eight stocks on our list. For comparison, we included their individual performance over the last month and the last quarter, to see more specifically how these healthcare stocks may be responding to the Affordable Care Act. 

Click on the interactive chart below to see data over time. 

Does the rollout of Obamacare inspire you to invest? Use the list below as a starting point for your own analysis.

1. GenMark Diagnostics, Inc. ( GNMK): Operates as a molecular diagnostics company primarily in the United States. Market cap at $401.83M, most recent closing price at $12.60.

Net institutional purchases in the current quarter at 2.5M shares, which represents about 8.3% of the company's float of 30.13M shares. 

EPS Growth over the next 5 years: 30%.

Performance over the last month: 5.97%.

Performance over the last quarter: 24.38%. 

20-day MA: 4.12%.

50-day MA: 11.46%.

200-day MA: 6.98%.

 

2. Ligand Pharmaceuticals Incorporated ( LGND): Operates as a biotechnology company. Market cap at $966.15M, most recent closing price at $47.69.

Net institutional purchases in the current quarter at 703.5K shares, which represents about 5.11% of the company's float of 13.76M shares. 

EPS  Growth over the next 5 years: 30%. 

Performance over the last month: 1.45%.

Performance over the last quarter: 8.07%.

20-day MA: 5.18%.

50-day MA: 5.36%.

200-day MA: 46.68%.
 

 

3. Pacific Biosciences of California, Inc. ( PACB): Develops, manufactures, and markets an integrated platform for genetic analysis. Market cap at $303.42M, most recent closing price at $4.90.

Net institutional purchases in the current quarter at 2.5M shares, which represents about 5.96% of the company's float of 41.98M shares. 

EPS Growth over the next 5 years: 30%.

Performance over the last month: 34.25%.

Performance over the last quarter: 82.16%.

20-day MA: 2.83%.

50-day MA: 17.52%.

200-day MA: 70.85%.
 

 

4. Salix Pharmaceuticals Ltd. ( SLXP): Develops, and commercializes prescription drugs for the treatment of gastrointestinal disorders in the United States. Market cap at $4.27B, most recent closing price at $69.62.

Net institutional purchases in the current quarter at 3.8M shares, which represents about 6.38% of the company's float of 59.53M shares. 

EPS Growth over the next 5 years: 21%.

Performance over the last month: 3.72%.

Performance over the last quarter: 0.93%.

20-day MA: 1.17%.

50-day MA: 1.46%.

200-day MA: 18.31%.
 

 

5. Lannett Company, Inc. ( LCI): Develops, manufactures, packages, markets, and distributes generic pharmaceutical products sold under generic chemical names in the United States. Market cap at $589.23M, most recent closing price at $20.49.

Net institutional purchases in the current quarter at 893.7K shares, which represents about 5.44% of the company's float of 16.42M shares. 

EPS Growth over the next 5 years: 20.75%.

Performance over the last month: 14.73%.

Performance over the last quarter: 46.57%.

20-day MA: 6.04%.

50-day MA: 28.36%.

200-day MA: 79.68%.
 

 

6. Nxstage Medical, Inc. ( NXTM): Engages in the development, manufacture, and marketing of products for the treatment of kidney failure, fluid overload, and related blood treatments and procedures in the United States. Market cap at $805.08M, most recent closing price at $13.41.

Net institutional purchases in the current quarter at 4.4M shares, which represents about 8.39% of the company's float of 52.46M shares.

EPS Growth over the next 5 years: 20%.

Performance over the last month: 7.28%.

Performance over the last quarter: -4.56%.

20-day MA: 2.13%.

50-day MA: 4.56%.

200-day MA: 8.31%.
 

 

7. Tornier N.V. ( TRNX): Operates as a medical device company that designs, manufactures, and markets devices for joint replacement and soft tissue repair that enable surgical specialists to improve patients' lives by restoring motion and physical vitality. Market cap at $958.14M, most recent closing price at $21.29.

Net institutional purchases in the current quarter at 6.0M shares, which represents about 21.19% of the company's float of 28.31M shares.

EPS Growth over the next 5 years: 20%.

Performance over the last month: 8.84%.

Performance over the last quarter: 19.74%.

20-day MA: 6.16%.

50-day MA: 8.33%.

200-day MA: 16.84%.
 

 

8. Concord Medical Services Holdings Limited ( CCM): Operates a network of radiotherapy and diagnostic imaging centers in the People's Republic of China. Market cap at $82.75M, most recent closing price at $5.51.

Net institutional purchases in the current quarter at 1.4M shares, which represents about 6.41% of the company's float of 21.84M shares. 

EPS Growth over the next 5 years: 20%.

Performance over the last month: 2.8%.

Performance over the last quarter: 31.5%.

20-day MA: 3.05%.

50-day MA: 9.26%.

200-day MA: 24.26%.

 

 

( List compiled by Emily Smykal, Kapitall's Senior Editor. Analyst ratings sourced from Zacks Investment Research. Institutional data sourced from Fidelity, all other data sourced from Finviz.)

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