Healthcare Business

Upcoming Catalysts Could Drive Seven Biotech and Health Care Stocks Higher

Binary events are often the key element in moving a biotech or health care stock higher. Negative binary results or actions often can move shares drastically lower. We scan our 24/7 Wall Street research data base on a regular basis looking for upcoming catalysts that have the potential to move stocks.

A new report from biotech and health care boutique Leerink focuses on stocks with key data readouts coming soon and a group of large cap names that could see reimbursement and public exchange profitability information reported.

Aetna Inc. (NYSE: AET) makes the list and trades at just touch over 14 times earnings. The company is one of the nation’s leading diversified health care benefits companies, serving an estimated 44 million people while offering a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities.

Aetna is one of a number of stocks involved in the public exchanges set up in the Affordable Care Act. Its reporting on plan profitability will be a key for analysts tracking the stock. Investors are paid a 1.1% dividend. The Thomson/First Call price target for the stock is at $86.53. Aetna closed Monday at $82.45 a share.

Amicus Therapeutics Inc. (NASDAQ: FOLD) has been on fire, and was a featured stock recently with very large insider buying. The Leerink team is very positive on the outcome of the Phase 3 study 012 data for Amigal. They assign 75% and 50% probabilities of success in the European Union and the United States for approval, up from 20% before. The consensus price target for the stock is $6. Amicus closed Monday at $3.90.

ALSO READ: Path to FDA Approval Could Launch Seven Biotech Stocks Much Higher

Genomic Health Inc. (NASDAQ: GHDX) is a company that could benefit from the removal of a reimbursement overhang for its OncotypeDx breast cancer test. Medicare is expected to release a preliminary reimbursement rate in late September, with a final determination by November. The consensus price target for the stock currently stands at $30.17. Shares closed Monday at $27.33.

Humana Inc. (NYSE: HUM) has a unique earnings profile and is the closest thing in the space to a Medicare Advantage pure play with about 60% of operating earnings levered to this segment and a strong market position. Future growth should come from a combination of baby boomers (turning 65 at the rate of 8,000 per day for the next 18 years) and continued market share gains and potential shifts from employers to Medicare.

The company is another that will be closely watched for revenues and profitability from the public exchanges. Investors are paid a 0.95 dividend. The consensus price target is pegged at $124.20, but Humana closed Monday at $128.27.

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