Who's in the lead for our "Diagnose the Dow!" healthcare stock-picking contest? With just a week to go, two new players have vaulted into the Top 5. If you think you can do better, hurry and sign up for your chance to win an iPad.
How are your healthcare stock picks faring in the Physician’s Money Digest "Diagnose the Dow!" contest?
With just a week to go before the contest ends, the top performers are battling for first place. This week, newcomers apblanford and hfreeland jumped into the Top 5. Here are this week’s top performers:
The contest isn't over, but time is running out. To play, log in to your account, click on the "Make a Trade" tab and choose your healthcare stock! (If you need help with your user name or password, send an email request to email@example.com.) Be sure to pick stocks in the healthcare sector only! Contestants who pick non-healthcare stocks will be disqualified.
In Healthcare Sector, a Stock Picker's Market
For healthcare investors, it's been a stock picker's market -- the healthcare sector as a whole has lagged the broader stock market's post-Thanksgiving rally. The Health Care Select Sector exchange-traded fund is up 0.08% for the week thus far, while the S&P 500 thus far is up 1.9%.
Analysts weighed in recently with their ideas for long-term winners in the sector. The stock screeners over at the Investment Underground blog tried find public companies that would match the style of value-investing guru Warren Buffett. The critera: the companies had to have sustainable business advantages producing significant free cash flows, and healthy returns on equity in excess of 10%. They also kept the list to companies with market caps of $10 billion or more that would “move the needle,” or allow the investment guru to “acquire enough shares to make the investment worthwhile given Berkshire’s size,” according to the blog.
Of the 12 company names that emerged, eight were healthcare related. Here are the Buffett-worthy picks: Abbott Laboratories (NYSE: ABT); Becton, Dickinson & Co. (NYSE: BDX); Covidien PLC (NYSE: COV) — also one of our Top 5 contest-leading picks; Medtronic Inc. (NYSE: MDT); Novartis AG (NYSE: NVS); Roche Holdings AG; St. Jude Medical Inc. (NYSE: STJ); and Zimmer Holdings Inc. (NYSE: ZMH).
Becton Dickinson made an appearance in another stock-picking piece last week. Investing information clearinghouse Investopedia highlighted a handful of medical-instrument makers, including Becton Dickinson, that investors should consider. Among its other picks, tiny Harvard Bioscience Inc. (NASDAQ: HBIO) was singled out as a stock that may present “a big opportunity for investors.” Though its share price is down 60% from its initial offering price, the author says, “by most valuation metrics, the stock is trading below its five-year averages. I don't see much downside here.”
Another pick: ICU Medical Inc. (NASDAQ: ICUI). Its sales jumped 40.3% to $75.7 million and earnings per share were up 54.8% in the third quarter. According to Investopedia: “This is a company with positive free cash flow in the last decade.” And finally, Hill-Rom Holdings Inc. (NYSE:HRC), was cited for its ability to consistently grow sales, increase gross margins and contain costs. Says the author, “I wouldn't say its stock is cheap right now, but long-term it is a winner.
So what are you waiting for? Log in to your account and choose your healthcare stock picks now. You could win a new iPad!
No purchase necessary. Odds of winning depend on the number of entries received. The Physician's Money Digest "Diagnose the Dow!" healthcare stock-picking contest is open from Sept. 27, 2010 through Dec. 10, 2010. For full contest rules, visit PMDStocks.com.