The Federal Reserve will proceed with another big boost in interest rates later this month as the consumer price index for June might have hit a fresh 40-year high. Although recession fears swirl on Wall Street, investors are keeping good hope in this corporate earnings season, given resilient consumer spending and a steady unemployment rate.
However, many stocks in the healthcare and solar industry held up amid this uncertainty and offered some support to the market with their impressive price performances. Therefore, it could be worth considering these stocks for your portfolio.
Centene Corporation (CNC), McKesson Corporation (MCK), and Enphase Energy, Inc. (ENPH) have been among the market movers lately. So, it could be worth watching these stocks for attractive entry opportunities.
Centene Corporation (CNC)
CNC operates as a multi-national healthcare enterprise that provides programs and services to government-sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals.
It provides its services through primary and specialty care physicians, hospitals, and ancillary providers, primarily through Medicaid, Medicare, and commercial products.
On May 6, 2022, CNC’s Missouri subsidiary, Home State Health, was awarded the MO HealthNet Managed Care General Plan and Specialty Plan, allowing its continued service to multiple MO HealthNet programs, including Children’s Health Insurance (CHIP) members and Medicaid expansion population. This will help CNC expand its reach, deliver member-focused care, and improve health outcomes.
For its fiscal 2022 first quarter ended March 31, 2022, CNC’s total revenues increased 24% year-over-year to $37.19 billion. The company’s earnings from operations came in at $1.25 billion for the quarter, indicating an 18.9% year-over-year improvement.
Its net earnings came in at $849 million, representing a 21.5% rise from the prior-year period. CNC’s EPS increased 21% year-over-year to $1.44. The company had $11.24 billion in cash and cash equivalents as of March 31, 2022.
The consensus EPS estimate of $5.59 for fiscal 2022 ending December 31, 2022, indicates an 8.5% year-over-year improvement. It surpassed Street EPS estimates in three of the trailing four quarters. Analysts expect the stock’s revenue to be $142.59 billion for the same fiscal year, representing a 13.2% rise from the prior-year period. Its EPS is expected to grow at 11.6% per annum over the next five years.
CNC’s 5.6% trailing-12-month ROTC is higher than its negative industry average. The stock’s trailing-12-month ROA has been 1.8%, significantly higher than its negative industry average. The stock has gained 6.6% over the past month and 2.1% over the past week to close the last trading session at $88.01.
CNC’s POWR Ratings reflect this promising outlook. The stock has an overall A grade, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
It has an A grade for Growth and a B for Value and Sentiment. Click here to see the additional ratings for CNC’s Momentum, Quality, and Stability.
CNC is ranked #4 of 11 stocks in the A-rated Medical - Health Insurance industry.
McKesson Corporation (MCK)
MCK provides healthcare supply chain management, retail pharmacy, community oncology, specialty care, and healthcare information solutions internationally. It partners with payers, hospitals, physician offices, pharmacies, pharmaceutical companies, and others to build healthier organizations that deliver better patient care.
On June 23, 2022, MCK and the for-profit operator of health care facilities, HCA Healthcare, Inc. (HCA), agreed to form a joint venture combining MCK’s US Oncology Research (USOR) and HCA’s Sarah Cannon Research Institute (SCRI).
The joint venture plans to offer an expanded clinical research network, a broader portfolio of clinical trials and enhanced data and analytics capabilities to match patients with clinical trials better.
For its fiscal 2022 fourth quarter ended March 31, 2022, MCK’s net sales grew 18.8% year-over-year to €14.64 billion ($14.91 billion). The company’s adjusted gross profit came in at $3.37 billion, indicating a 5.7% rise from the year-ago period.
Its adjusted net earnings came in at $870 million, up 7.4% from the prior-year period. MCK’s adjusted EPS increased 15.5% year-over-year to $5.83. As of March 31, 2022, the company had $3.53 billion in cash and cash equivalents.
The consensus revenue estimate of $268.07 billion for fiscal 2023 ending March 31, 2023, represents a 1.6% rise from the prior-year period. It surpassed Street EPS estimates in three of the trailing four quarters. The company’s EPS is expected to grow at a 13.6% rate per annum over the next five years.
MCK’s 18.9% trailing-12-month ROTC is higher than its negative industry average. The stock’s trailing-12-month ROA has been 1.8%, significantly higher than its negative industry average. The stock has gained 5.1% over the past month and 0.5% over the past week to close the last trading session at $331.20.
MCK’s POWR Ratings reflect its solid prospects. The stock has an overall A rating, equating to Strong Buy in our proprietary rating system.
It has a B grade for Value, Growth, Stability, Sentiment, and Quality. In addition to the POWR Ratings grades we have just highlighted, one can see MCK’s Momentum rating here.
MCK is ranked #1 of 83 stocks in the C-rated Medical - Services industry.
Enphase Energy, Inc. (ENPH)
ENPH provides energy management solutions for the solar photovoltaic industry worldwide. The company manufactures and sells semiconductor-based microinverters and its proprietary networking and software technologies to provide energy monitoring and control services.
It serves solar distributors, OEMs, strategic partners, homeowners, and the do-it-yourself market.
On April 19, 2022, ADT Solar, a leading rooftop and residential solar-plus-storage service provider, expanded its agreement with ENPH to offer Enphase IQ8 Microinverters and Enphase IQ Batteries as part of its comprehensive home energy solution.
IQ8 Microinverters can form a microgrid during a power outage, using only sunlight to provide backup power without requiring a battery. This will help the companies provide homeowners with even greater resilience and energy independence while saving money on their energy bills.
For its fiscal 2022 full year ended March 31, 2022, ENPH’s net revenue increased 46.2% year-over-year to $441.29 million. The company’s non-GAAP gross profit came in at $180.78 million, up 45.9% from the prior-year period. Its non-GAAP operating income came in at $114.53 million for the quarter, representing a rise of 42.8% from the year-ago period.
While its non-GAAP net income increased 39.4% year-over-year to $109.67 million, its non-GAAP EPS grew 41.1% to $0.79. The company had cash and investments of $251.85 million as of March 31, 2022.
The consensus EPS estimate of $3.49 for fiscal 2022 ending December 31, 2022, indicates a 44.8% year-over-year improvement. It surpassed Street EPS estimates in each of the trailing four quarters, which is impressive. Analysts expect the stock’s revenue to be $2.08 billion for the same fiscal year, representing a 50.9% rise from the prior-year period. Its EPS is expected to grow at 20.7% per annum over the next five years.
ENPH’s 8.2% trailing-12-month ROTC is 80.3% higher than its 4.5% industry average. The stock’s trailing-12-month ROA has been 7.3%, 144.6% higher than its 3% industry average. The stock has gained 5.7% over the past month and 10.6% over the past week to close the last trading session at $216.45.
ENPH’s POWR Ratings reflect this promising outlook. The stock has an A grade for Quality and a B for Sentiment. Click here to see the additional ratings for ENPH’s Momentum, Value, Growth, and Stability.
ENPH is ranked #2 of 18 stocks in the Solar industry.
CNC shares were trading at $87.78 per share on Monday afternoon, down $0.23 (-0.26%). Year-to-date, CNC has gained 6.53%, versus a -18.41% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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