The biotech industry should thrive this year amid progressive growth and rising investments. Therefore, fundamentally strong biotech stocks, Alkerms ( ALKS ) and Nippon Shinyaku ( NPPNY ) could be ideal buys. read more.
Despite economic woes, the SPDR S&P Biotech ETF (XBI) has risen 5.1% in the past month, indicating investor confidence in the industry. Additionally, growing technological advancements and regulatory approvals in key areas of innovation are expected to boost the biotech industry.
Given the background, I think quality biotech stocks like Alkermes plc (ALKS) and Nippon Shinyaku Company Limited (NPPNY), which has maintained stable profit margins, may be worth buying now. These stocks are Buy-rated in our proprietary rating system.
Biotechnology is evolving, thanks to technological advancements, major players in the market are constantly launching new products to strengthen their position in the industry. Data Bridge Market Research predicts that the biotechnology market will reach $10.13 trillion by 2030. CAGR of 29%.
Moreover, the pandemic has accelerated the shift towards digitalisation, telemedicine and personalized medicine, all of which are expected to fuel growth in the industry.
The market for personalized medicine and companion diagnostics is expected to grow due to the increasing prevalence of rare diseases and advances in understanding the human genome.
The global personalized medicine market is estimated to grow at a rate of a CAGR of 10.9% will reach $540.12 billion by 2028.
The US Amid the trending debate about whether this year will enter a recession, Evolve Funds President and CEO Raj Lala recently commented that even if it does, biotech companies “Keep up the good work“
Take a look at the above stocks:
Alkerms plc (ALKS)
Headquartered in Dublin, Ireland, ALKS is a biopharmaceutical company that researches, develops and commercializes pharmaceutical products to address the unmet medical needs of patients in various therapeutic areas in the United States, Ireland and internationally.
Its trailing-12-month asset turnover ratio of 0.57x is 64.5% higher than the industry average of 0.35x. Its trailing 12-months Gross profit margin 55.65% of 80.48% is 44.6% higher than the industry average.
ALKS reported total revenue of $287.60 million for the quarter ended March 31, 2023, compared to $278.55 million for the same period last year. Non-GAAP net income for the quarter was $2.42 million, while its non-GAAP earnings per share were $0.01.
ALKS’s revenue is expected to grow 15.3% year over year to $318.39 million in the fiscal second quarter ending June 2023. The company’s EPS for the same quarter is expected to come in at $0.01. Additionally, the stock has topped consensus EPS and revenue estimates in three of the past four quarters, which is impressive.
Shares have gained 22.4% over the past six months to close the last trading session at $28.55.
of ALKS POWR Ratings reflecting his optimistic outlook. The stock has an overall rating of A, which translates to a strong buy in our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
ALKS also has a B grade for growth, value, value and quality. It ranks first out of 383 stocks in Biotech industry.
To obtain additional ratings for ALKS’s Stability and Momentum, Click here.
Nippon Shinyaku Company Limited (NPPNY)
Headquartered in Kyoto, Japan, NPPNY manufactures and markets pharmaceuticals and food products in Japan and internationally. The company operates through the Pharmaceuticals and Functional Foods segments.
Its trailing-12-month gross profit margin of 61.12% is 9.8% higher than the industry average of 55.65%. Its trailing-12-month asset turnover ratio of 0.65x is 85.1% higher than the industry average of 0.35x.
NPPNY’s revenue rose 3.4% year-over-year to ¥109.92 billion ($821.42 million) in the fiscal third quarter, which ends March 31, 2023. The company’s operating income came in at ¥27.99 billion ($209.15 million), while profit is due. ¥22.67 billion ($169.44 million) came to the owners.
Analysts expect NPPNY’s revenue to rise 12.6% year over year to $271.50 million in the third quarter ended March 2023. Additionally, the stock has topped consensus earnings estimates in three of the past four quarters.
Shares have risen marginally over the past month to close the last trading session at $11.30.
NPPNY’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.
NPPNY also has a B grade for value, stability and quality. It ranks #11 in the same industry.
To get additional ratings for NPPNY’s Growth, Sentiment and Momentum, Click here.
What to do next?
Get your hands on this special report with 3 undervalued companies with tremendous upside potential even in today’s volatile markets:
3 stocks have doubled this year >
ALKS shares were unchanged in premarket trading on Monday. Year-to-date, ALKS is up 9.26%, compared to a 9.17% gain in the benchmark S&P 500 index over the same period.
About the Author: Nidhi Aggarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor’s degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
Post Healthy Profits: Watch These 2 Buy-Rated Biotech Stocks in May appeared first StockNews.com
—————————————————-
Source link