Health: Three stocks for purchase and two for sale

The outlook for the sector in the short term is very mixed. Sort Addiction Leader, Test Plant, Laboratory, Animal Health Specialist, and Medical Equipment Supplier!

Market Star in 2020 With technology, the health sector has had a shy start to this year.

Since 1is being In January, the CAC Healthcare Index – which includes the major health stocks listed on Euronext – rose 3.5%, while the SBF 120 4% gain during the period. Some values ​​are struggling, others are still very much needed.

Here are three stocks to put in your portfolio and two that are best selling.

Corian: The horizon is clear

The nursing home group has survived the health crisis well. Its sales increased by 7.2% last year, to € 3.87 billion. The organic growth rate has reached 2%. Activity accelerated in the fourth quarter as sales increased 10.9%.

The advance of vaccinating the elderly or the vulnerable against Covid-19 heralds the continuation of this trend in 2021, even if leaders do not take the risk of setting financial goals for themselves for now. However, they confirmed their ambitions for 2022, i.e. a turnover of over € 4.5 billion and a gross operating surplus margin (EBITDA) of 15.5% of sales, compared to 13.9% in 2020.

Korean At the same time, it continues to boost its real estate portfolio, which now stands at 2.67 billion euros. Enough to secure the majority of its 3.16 billion euro net debt. The group has also just proven itself in the UK.

The uncertainties associated with this pandemic have reduced stocks by 26% in one year. Trading 21 times the net profit per share (BNA) at the end of 2021 and 16.9 times what was expected at the end of 2022, it seems to us that it is undervalued.

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Our advice: Buy Korean. [KORI]

Novacet: The test frenzy dries up

Medtech is one of the values ​​that has benefited the most from the health crisis. More than a year, work Novacet 515% wins! After hitting an all-time high on January 25, at € 13.62, the title gradually fell back to € 8. The company has rapidly managed to position itself in the market for diagnostic tests for Covid-19 with a range that has recently expanded into the variants. Its turnover doubled by more than twenty last year, to 311.6 million euros.

Novacyt is expected to benefit from demand for its products again this year, but its revenue is likely to drop sharply when the pandemic is brought under control.

FactTest consensus is based on a 2% increase in sales in 2021, and then on a 44% decrease in 2022. Admittedly, leaders do not count on their laurels and rely on a strategy to diversify their activities. They have to detail their plan in the second quarter.

In the near future, it seems that we are better off taking profits from this stock, aiming to return to it if the new strategy of the company proves convincing.

Our advice: sold Novacet. [ALNOV]

Ibsen: Good surprises are possible

The pharmaceutical company shareholders must have had their heart set on these past few years.

After reaching a historic high of over € 150 in September 2018, the event came Ibsen It suddenly fell below 35 € in March 2020. It is currently trading at 71 €. Clinical setbacks, change of CEO, new strategic plan … the group has embarked on a transformation that seems compelling to us.

As of this year, it could sell its declining family health business, which accounts for less than 10% of sales volume and is the forte of Smecta in particular. This will increase the cash flow with the goal of making acquisitions in the promising specialty medicine field (oncology, neurodegenerative diseases, etc.).

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Despite the pandemic, Ipsen’s sales grew 3% last year (in fixed currencies), to € 2.59 billion. Current operating margin increased 1.6 percentage points to 32% of sales. Executives are targeting sales growth of over 4% this year (in hard currencies) and a current operating margin of over 30%. The flagship drug of the group, the anti-cancer drug Somatulin, could, in our opinion, be better than expected in the face of competition from generic drugs.

Additionally, regulatory decisions related to Cabometyx and Palovarotene this year could increase Ipsen’s share if it is positive. Especially since the valuation is attractive: barely 9.6 times the expected net profit per share at the end of 2021. The group plans to pay dividends of 1 euro per share this year, as was the case last year.

Our advice: Buy Ibsen. [IPN]

Guerbet: While waiting for your appeal

Last year, the medical imaging specialist’s activity has suffered from the postponement of many non-priority radiological examinations and interventions in the context of the COVID-19 pandemic. Its sales decreased by 12.8% in 2020 to 712.3 million euros. Even if this year is better, especially thanks to the deployment of vaccines against the Coronavirus, vision is poor for the development of activity.

Because in addition to the doubts about the pace of “returning to normal”, I tried It faced more than two years of competition from generic producer for its leading contrast product, Dotarem, in Europe. However, very soon a year could overshadow the US market.

The procedure drops 11% over one year and 55% over three years. It is trading 12.5 times the expected net earnings per share at the end of 2021, and 10.8 times what was expected at the end of 2022. Certainly, this means that analysts are expecting higher earnings in the coming years.

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But while waiting to learn more about the progress of the 2023 strategic plan for leaders, staying further away will be safer.

Our advice: sold I tried. [GBT]

Firebuck: next to the animal bed

The animal health specialist benefits from the flexibility of his market. Last year’s sales of Verbuck It showed a limited drop of 0.4% to 934.2 million euros. In range and fixed currencies, sales increased 5.7%.

Managers this year aim to increase sales volumes by 3% to 5% (at fixed and peripheral exchange rates), plus a gross operating surplus margin (EBITDA) of between 10% and 12% of sales, compared to around 14% estimated for the year ended. This decrease in profitability is mainly due to the sale of the Sentinel anti-parasite range and is expected to be temporary. The group has been eliminated from debt, which allows it to look into acquisitions and internal investments.

Leaders are usually careful when setting goals. It wouldn’t be surprising if they passed them over, like last year. Annual results will be revealed on March 17th and could be a catalyst for this title which has dropped nearly 14% since 1is being January.

Its assessment is prerequisite: 30.4 times the expected net profit at the end of 2021 and 26.9 times what was expected at the end of 2022. But it does not appear to be excessive for the growth inventory concentrated in a booming market.

Our advice: Buy Verbuck. [VIRP]

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