Quickel's Picks: Tech & Healthcare

04/21/2017 2:50 am EST


Stephen Quickel

Editor, US Investment Report

In an uncertain market that’s been stuck at an elevated level since March 1—aggravated by investor disappointment over un-kept election campaign promises—we’ve found it more difficult than usual to come up with promising stock picks, explains Stephen Quickel, growth and value investing expert and editor of US Investment Report.

The five newcomers to this our Recommended List are in just two top industry sectors, technology and healthcare, which remain strong in a weak but elevated market.

Supernus Pharmaceuticals (SUPN) is a highly profitable small-cap drug maker specializing in diseases of the central nervous system such as migraines and epilepsy.

SUPN netted $91 million on revenues of $250 million last year. Five-year earnings growth is projected at 23%, with a 134% total advance estimated for the current and coming fiscal years.

PRA Health Sciences (PRAH) is a highly-regarded contract pharmaceutical research company. The shares plateaued at $64 during March, producing a buying opportunity.

arnings are expected to grow 19% a year. Analysts’ average price target is $70-$71. We think $80 is possible.

Carbonite (CARB) is a cutting-edge provider of cloud and data protection solutions for small and mid-sized businesses, with partners, supports over 1.5 million clients worldwide (including US Investment Report).

Earnings growth is projected by seven analysts at 30% a year, making the seemingly elevated P/E of 28 into an attractive PEG ratio of 0.95. The stock trades 7% off its high.

Micron Technology (MU) is not a new stock to our subscribers; Micron is currently enjoying strong demand for its memory chips, with revenues up 58% year-over-year in its recently ended second quarter. Analysts target price is $39, while our target is $42.

Lam Research (LRCX), a semiconductor wafer fabricator’s customer base, has a distinct Asian tilt. Revenue sources: Taiwan 37%, Korea 26%, China 10%, Japan 8%. Only 10% of sales each comes from the US and Europe.

Analysts see a price move from $128 to $134. We think their 12.5% a year EPS growth estimate is too low; our target price is $143 despite the 1.23 PEG ratio.

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