Three Cheap Healthcare Stocks Worth Buying Now

The start of this year has been a wild ride, to say the least. There has been a lot of market volatility, but the S&P 500 is finally close to reaching positive territory in 2016. Don’t settle for breaking even though.

Below, we outline three companies in the healthcare sector which have significantly outperformed the S&P’s year-to-date performance. The positive growth and value metrics of these small-cap corporations make them attractive buys right now.

AMN Healthcare Services, Inc-(AHS - Snapshot Report)

AMN Healthcare Services is a travel healthcare staffing company, and its stock is a Zacks Rank #2 (Buy). AHS stock is pretty cheap across several valuation metrics, which is why it gets a “B” for Value in our Style Scores. 

The company trades at a price-to-sales of just 1.06.AMN’s forward PE is 15.93, which is lower than the industry’s average PE of 17.29.It’s worth noting that AHS has a PEG of just 1.33.

What makes AMN Healthcare Services really stand out are its growth metrics. The staffing company projects EPS growth of 24.19% this year, and has a debt-to-capital of 34.22%.AHS has a net margin of 5.6%, which is way ahead of the industry’s average net margin of just 2.66%. 

AMN delivers a trailing twelve month ROE of 25.97%, while the industry’s average ROE is just 11.09%. AMN is growing, and sales are projected to increase by 23.76% this year.

Employer Holdings, Inc-(EIG - Snapshot Report)

Employer Holdings provides workers compensation insurance, with a focus towards insuring small businesses in low to medium hazard industries. The company holds a Zacks Rank #1 (Strong Buy). It’s worth noting that EIG doles out a 1.29% dividend. 

Employer Holdings is an especially attractive bargain, as it trades at a price-to-book of just 1.19. The company also trades at a forward PE and price-to-sales of just 11.79 and 1.21, respectively. 

EIG also has some attractive growth metrics. The company’s EPS is projected to grow by 5.73% this year, and it also posts a sizable net margin of 12.55%. Employer Holdings’ sales are projected to increase by 5.4% this year, which is significantly more than the 3.06% sales growth expected from the industry as a whole. 

The company has posted positive free cash flows over the last two years, which helps to make up for EIG’s less than ideal liquidity position.

Computer Programs and Systems, Inc-(CPSI - Snapshot Report)

Computer Programs and Systems offers health information and patient care systems which capture a full range across financial and clinical applications.The company is a Zacks Rank #1 (Strong Buy) and doles out a massive dividend that yields 4.9%. 

The dividend appears to be sustainable, as CPSI has plenty of liquidity to fall back on.Computer Programs has over 80% of its assets financed through equity, and it also has a current ratio of 4.28.The company’s cash balance has been growing over the last four years, which is great news for investors counting on dividends from CPSI. 

Computer Programs and Systems Inc is pretty cheap with a PEG very close to 1.It has a forward PE of 15.01, while the industry’s average PE is 24.7.

The healthcare-focused IT company has some considerable growth potential.Earnings are projected to grow by 113.69% this year.This is good to see, because 2015 wasn’t a great year for the company in terms of net income. 

CPSI enjoys superior profitability compared to the industry, posting net margins of 9.89%.Computer Programs also has a trailing twelve month ROE of 22.95%, which is amazing when compared to the industry’s average ROE of 6.94%.CPSI’s sales are projected to grow by 71.87% this year.

Bottom Line

Each of these companies offers investors something different, whether it’s a nice dividend, amazing growth prospects, or a superior bargain. What these companies do have in common, though, is the fact that they have all seen earnings estimates being revised upwards for this quarter. 

Upward revisions from financial analysts will boost sentiment for these companies as they approach their earnings releases. The Zacks Rank helps to capture this, which is why it was such an important factor to consider when finding dependable companies to invest in.

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