A Watch List in Healthcare and Technology
06/02/2016 9:00 am EST
The market is certainly dark enough—with stocks still trading below their December 1st highs of nearly six months ago and showing no appreciable advance since 2014, explains Stephen Quickel, editor of US Investment Report.
Indeed, from 2014 onward the Dow, S&P 500, Nasdaq and Russell 2000 have gone nowhere. Small wonder investors are befuddled.
Our decision now is whether to redeploy portions of our still-large cash reserves of more than 40%? Or do we take a breather for now and remain on the sidelines?
We are opting for the sidelines at this point. In the meantime, we are highlighting some select stocks as a "watch list" of potential new recommendations.
We also recommend Adobe Systems (ADBE) a technology household name slated to grow earnings 28% a year.
Also of interest in the current market dip is Gartner (IT). It is one of those perennially favored stocks whose high valuation (a 1.50 PEG) is ignored because it keeps on rising more or less without interruption (quadrupling since 2012).
That same exalted status also applies to Edwards Lifesciences (EW), a leader in structural heart and other critical disease treatment products. It now trades at a 1.60 PEG and has tripled since 2013.
Also in medical products, we suggest a look at small-cap Cambrex (CBM), and Zimmer Biomet (ZBH), formed by the 2015 merger of Biomet and Zimmer Holdings, which has a market cap of $23 billion and a 12 P/E that’s due for an upgrade.
In the wondrous world of WiFi, Ubiquiti Networks (UBNT) is a fast-growing, modestly valued leader in developing new and improved routers, switches and networking solutions.
Analysts foresee 22% a year earnings growth for a stock selling at a bargain-basement 0.54 PEG.
By Stephen Quickel, Editor of US Investment Report