Tuesday, October 7, 2008

Health-care Value Stocks.

Global stock markets are still in the selling pressure and volatility index VIX is already second week above 40 points. In fact this week index is oscillating around level of 50. This is right time for value investor for bargain searching. Many worthy stocks are below P/E 10 with still perspective growth and book value equaling to stock price.

Uncertainty about future attracts more attention to defensive sectors like health-care or consumer staples. I run fundamental stock screen for large cap health-care stocks with P/E below 15 and Price-Book Value below 4. Here is the list of potential value plays.

Ticker Company Name PEG P/E P/BV
(UNH) UNITEDHEALTH 0.7 7.5 1.4
(WLP) WELLPOINT 0.65 7.7 1
(AET) AETNA 0.62 9.3 1.6
(NVS) NOVARTIS 2 9.8 2.3
(AZN) ASTRAZENECA 9.6 10.8 3.9
(LLY) LILLY ELI CO 1.65 11 3
(WYE) WYETH 3.61 11.1 2.5
(SNY) SANOFI-AVENTIS 2.83 12.1 1.4
(MRK) MERCK 1.58 13.2 3.2
(PFE) PFIZER 2.08 14.2 1.9


2 Responses to "Health-care Value Stocks."

d said... October 8, 2008 at 9:52 PM

Hey Vlada,

I'm not familiar with the company, but based on the figures you posted AZN looks overvalued.

Do you think it's a good shorting opportunity after the next rally?

Vlada, Czech Republic said... October 8, 2008 at 10:46 PM

Hi D,
relatively AZN seems to be more overvaluated than others based on P/BV. But generally all these stocks at current prices I consider as a good long positions. My personal favorite is NVS. Solid growth and many projects submitted for regulatory approval.