The key to success in investing in markets is to choose the right assets or stocks to invest in, at the right time. Most investors fail to do so, and they leave a lot of unrealized potential on the table.
Right now, the stock market is extremely attractive, especially in the U.S., as markets have clearly broken out. Picking the outperforming stocks in the leading sectors is the right thing to do for low risk high profit trades.
The health sector is extremely attractive at this point, as explained in Health Sector Testing All-Time Highs In 2016. The chart that we featured in that article tells it all. So the key question is which stocks are outperformers in the health sector?
We very much like ABIOMED (ABMD), a company offering support and recovery products and services for heart patients. It has a broad array of choices across a broad clinical spectrum, from the catheterization lab to the surgical suite.
Some elements of ABIOMED’s fundamental story:
- Market cap: approximately $5B
- Quarter-on-quarter revenue growth between 5% and 10%
- Continuous quarter-on-quarter earnings growth
- Short float ratio of only 6%
- High P/E ratio of 138 but expected to fall to 66 by next year
- Cash and equivalents of $223M
- Number of shares growing between 3% and 8% per quarter.
The fundamentals for this super growth company are supporting the company’s positive outlook. Though the P/E ratio is very high, growth is sufficiently strong to justify this.
We are very positive about ABIOMED, and believe it will remain an outperformer in the health sector (and in the stock market in general).
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