Given the enormity of the healthcare space, the task of selecting stocks with possibilities to beat estimates could appear quite daunting. But the Zacks proprietary methodology makes this job fairly simple.
One way to carve out the top choices this reporting cycle is by looking at the stocks with the combination of a favorable Zacks Rank — Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — and a positive Earnings ESP. It is observed that a positive earnings surprise delivered by a company mostly leads to its stock price appreciation.
Per the well-researched quantitative model, an Earnings ESP is used for identifying stocks with higher or 70% chances of pulling off a positive surprise in the impending earnings announcement. It shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Per our proven methodology, we culled three stocks from large-cap pharma and two from the medical-drug sector, poised to surpass estimates in the to-be-reported quarter.
Best Gold Stocks To Invest In 2019: Anworth Mortgage Asset Corporation(ANH)
Anworth Mortgage Asset Corp. (NYSE: ANH) is a Santa Monica, Calif.-based mortgage real estate investment trust.
The company’s primary business is borrowing money through short-term repurchase agreements and investing in asset and mortgage-backed securities.
Anworth has beat earnings in five of the last six quarters and is on track to do the same again in the first quarter of 2018.
However, the company’s real attraction is its revenue – Anworth pays out a massive dividend yield of 12.5%.
This means that, on top of any stock appreciation, investors can collect a hefty 12.5% return from the company’s earnings no matter how the stock performs in the market.
Plus, ANH stock currently has a perfect Money Morning VQScore™ of 4.75, which means it’s a strong buy right now.
Answorth currently trades for around $4.69. With a strong dividend and low initial investment, Anworth is a sound penny stock investment for the enterprising investor.
Best Gold Stocks To Invest In 2019: Exelixis, Inc.(EXEL)
Pfizer’s (NYSE:PFE) Sutent has long been the go-to cancer drug used to treat first-line kidney patients. However, Sutent’s use in these patients may decline rapidly following the approval of Exelixis’ Cabometyx in that setting in December.
Cabometyx has been on the market as a second-line therapy since 2016, and since its approval, it’s steadily displaced the use of Afinitor, a drug that was generating $1.6 billion in annual sales prior to Cabometyx getting a green light. Given that Cabometyx first-line approval was based on its outperforming Sutent in trials, I expect it will have similar success in winning market share in the first-line indication.
So far, it appears to be off to a good start. Exelixis’ companywide revenue soared to $212.3 million in Q1, up 163% from one year ago, largely because Cabometyx’s revenue improved by 43% quarter over quarter to $129 million. According to management, Cabometyx’s market share among tyrosine kinase inhibitors (a commonly used class of drugs in kidney cancer) improved to 25% from 21% between Q4 and Q1 in 2018.
Cabometyx sales could climb significantly from here as doctors increasingly use it instead of Sutent in kidney cancer, but that’s not the only reason Exelixis revenue could continue higher. Management recently filed for Cabometyx’s approval in second-line liver cancer and a decision in that indication is anticipated later this year. If it gets the go-ahead, that could increase revenue by an additional nine figures.
The company reported first-quarter earnings per share of $0.37, and since sales are likely to continue growing, industry watchers think Exelixis’ EPS could grow to $1.28 next year. If they’re right, then buying Exelixis when its forward P/E ratio is just 14.9 could prove to be profit-friendly.
Best Gold Stocks To Invest In 2019: First Data Corporation(FDC)
I highly recommend tracking First Data Corp (NYSE:FDC) very carefully right now. First Data holds a relatively rare position as merchant acquirer, network, and issuer processor. Crucially, the company is also benefiting from the rise in electronic payments. People are turning away from cash and checks, and towards electronic transactions.
According to the wisdom of top Oppenheimer analyst Glenn Greene this stock can soar 51%. He picks First Data as his No. 1 fintech right now. Why does this matter? Well, our data places Greene as a Top 10 analyst for his stock picking ability. He currently boasts an 82% success rate and 20.9% average return on his stock recommendations.
According to Greene: “The company has an attractive business model, characterized by transaction-related fees, multi-year contracts, a diverse client base, and high incremental margins.” Plus he expected strong earnings growth as FDC “applies its sizable annual FCF [free cash flow] to debt paydown, and a narrowing of the valuation discount to peers.”
In the last three months, eight top analysts have published buy ratings on FDC with only one analyst staying sidelined. With shares down 9% YTD, the $21.61 average price target indicates big upside potential of 41%.
Best Gold Stocks To Invest In 2019: PayPal Holdings, Inc.(PYPL)
PayPal may be a common name in the digital-payments space, but its ongoing growth is anything but common. The company added 8.1 million new active accounts in its first quarter, a 35% year-over-year jump, which brings PayPal’s total accounts to a very impressive 237 million.
As PayPal’s users have increased, so has the amount the company processes through its payment platform. PayPal’s total payment volume (TPV) increased by 27% in the most recent quarter, and revenue popped by 24%, to $3.69 billion. Strong sales growth is great, of course, but PayPal is bringing in solid earnings for its investors, as well. The company reported $511 million in net income and $0.57 in adjusted earnings per share in the first quarter, a 29% year-over-year jump.
If PayPal’s core business was the only thing going for it, investors would have a lot be happy about. But the company is also making some big moves in the mobile peer-to-peer (P2P) space with its Venmo app. Venmo processed a total of $12.3 billion in the quarter, an increase of 80% year over year.
Best Gold Stocks To Invest In 2019: U.S. Bancorp(USB)
Most investors focus on the biggest banks in the country, and by that measure, U.S. Bancorp often flies just under the radar. Yet the Minneapolis-based super-regional bank occupies a space between the most massive too-big-to-fail banks and smaller regional players, with a nearly $500 billion asset base putting it squarely into the top 10 among American financial institutions.
U.S. Bancorp started 2018 strong, with solid mid- to high-single-digit percentage gains in key metrics like net interest income, payment services revenue, trust, investment management fees, and deposit service charges. Loan quality has remained strong, with minimal changes in delinquent loan ratios, and U.S. Bancorp’s return on assets rivals the best levels in the banking business.
One big reason to expect further gains from U.S. Bancorp is the fact that lower corporate income tax rates should help it retain more of its profits. Historically, the bank has paid effective tax rates of around 27%, so the new 21% rate is already helping to boost its bottom line and should continue to do so throughout 2018. With the additional tailwinds of a more favorable interest rate environment for retail and commercial banking, now’s a good time for bank investors to take a closer look at U.S. Bancorp.