For long-term investors, there could be recovery potential on offer. BP seems to offer a wide margin of safety, as well as a sound overall strategy. Therefore, alongside another turnaround stock which released a trading update on Tuesday, it could be worth a closer look.

Growth potential

The second company in question is surgical and advanced woundcare specialist Advanced Medical Solutions (LSE: AMS). It released a brief update which stated that trading for the year to 31 December is expected to be in line with plan. The company has been able to make good progress with the delivery of its strategy, with its growth rate supported by innovative product development.

Looking ahead, it’s expected to report a rise in earnings of over 9% in the next financial year. This suggests its strategy is sound and that its operating environment remains robust. Earnings growth has, of course, become the norm for the stock. In the last half-decade, it’s been able to increase its bottom line in every year, rising at an annualised rate of 12%.

Given the uncertain prospects for the UK and world economies, companies that are able to offer relatively robust financial prospects, such as Advanced Medical Solutions, could become increasingly popular. Therefore, following its share price decline of 25% in the last four months, it could offer long-term investment potential, in my opinion.

Recovery prospects

As mentioned, the BP share price has experienced a challenging period. The oil price has been a key driver behind weakness across the energy sector, with the price of Brent falling by $28 since early October. This has eradicated all of the gains made between the latter part of 2017 and October, and could mean that investors become increasingly concerned about the outlook for a number of oil and gas companies.

In such a scenario, it could be prudent to focus on larger stocks which may have stronger balance sheets and greater diversity. They may be hit less hard by further falls in the oil price, while also offering margins of safety, which suggest that successful turnarounds could be ahead. Although BP has experienced financial difficulty in the past, it appears to have a strong asset base and improving financial outlook.

Following its share price fall, the company trades on a price-to-earnings (P/E) ratio of around 11.8. This suggests that it may offer good value for money. As with any falling asset, there could be further declines ahead. But in the long run, today’s price seems attractive, in my opinion.

The post The BP share price is in freefall! This is what I think you should do appeared first on The Twelfth Magpie.

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• Just how bad could it get for the BP share price?
• BP shares are falling. But is the oil market actually tighter than investors think?
• How much is needed in a Stocks and Shares ISA for £357 of weekly passive income?
• Oil prices are falling. So why am I still bullish on BP shares?

Peter Stephens owns shares of BP. The Motley Fool UK has recommended Advanced Medical Solutions. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Fighting the urge

Patience is not only required when fighting the urge to take quick profits to the detriment of bigger long-term gains, but also in waiting for the right moment to buy a stock you’re particularly keen on. Seasoned investors who practice the strategy of buying on the dips will know exactly what I’m talking about. It always makes sense to buy shares in a quality company with great long-term prospects, but it makes even better sense when those shares are bought at a more sensible price.

It’s for this reason experienced investors use watchlists to keep an eye on their favourite stocks, ready to pounce when the opportunity presents itself. I’ve found watchlists particularly useful with high-growth small-caps commanding very high earnings multiples. In these instances it can often be prudent to stay on the sidelines and wait for the dips created by short-term sell-offs in order to gain a more favourable entry point.

Be ready to pounce

For instance, surgical and advanced wound care specialist Advanced Medical Solutions (LSE: AMS) has seen a fivefold increase in its share price in as many years, which in turn has left the shares trading on a very expensive earnings multiple of 33. Rather than dismiss the stock altogether, investors might be better advised to monitor the share price over the coming months and be ready to pounce on any signs of weakness.

The AIM-listed firm based in Winsford, Cheshire, continues to deliver strong organic growth supported by research and development (R&D) activities that provide both product innovation and intellectual property. With a rising incidence of both chronic and acute wounds, and predisposing factors such as obesity and diabetes on the increase, I believe the group is very well positioned to continue on its current growth trajectory. This is one small cap growth stock that certainly deserves a place on your watchlist.

High-growth opportunity

It’s a similar story over at fellow AIM constituent Tristel (LSE: TSTL). A number of years of strong growth propelled the company’s share price to record highs of 317p last Autumn, and despite a recent dip, the shares are still trading on a heady price-to-earnings (P/E) ratio of 32 for the current fiscal year to June.

The Cambridgeshire-based group is a manufacturer of infection prevention and contamination control products with its lead technology being a proprietary chlorine dioxide formulation that addresses the human healthcare, contamination control, and animal healthcare markets.

Tristel enjoys high levels of market penetration here in the UK, and this is reflected in last year’s sales figures which revealed that overseas sales grew faster at 43% than domestic sales at 3%, with overseas sales representing 47% of total sales compared to 39% in FY2016.

I believe further international expansion will be a key driver of growth in the coming years, which makes Tristel is another high-growth opportunity you might want to keep an eye on.

The post 2 small-cap growth stocks I’m watching closely appeared first on The Twelfth Magpie.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has recommended Advanced Medical Solutions. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

With that in mind, here are two healthcare companies that could be worth buying right now.

Encouraging progress

Reporting on Thursday was surgical and advanced wound care specialist Advanced Medical Solutions (LSE: AMS). The company reported that it is making good progress in the year to 31 December. It expects revenue and profitability to be in line with expectations that include the positive impact from the recent Organogenesis licensing deal. Its Research and Development activities continue to provide both product innovation and intellectual property, which means that the company is well placed to continue on its current growth trajectory.

In the current year, Advanced Medical Solutions is forecast to record a rise in its bottom line of 19%. It is due to follow this up with a rise in earnings of 7% next year. With it trading on a price-to-earnings growth (PEG) ratio of just 1.9, it appears to offer good value for money given its upbeat growth outlook.

Clearly, the company has delivered strong growth in the last year. Its share price has risen 55% since the start of 2017. However, investor sentiment may remain robust, since the stock offers a mix of low positive correlation with the wider economy as well as a reasonable valuation. As such, now could be a good time to buy it for the long run.

Solid progress

Also offering an upbeat outlook for its investors is advanced wound management and surgical devices specialist Smith & Nephew (LSE: SN). The company has a good track record of earnings growth, with its bottom line rising in four of the last five years. This shows that it could have strong defensive characteristics and may be a worthwhile holding during the current period of uncertainty regarding the UK’s economic outlook.

Looking ahead, Smith & Nephew is expected to record a rise in its bottom line of 8%, followed by additional growth of 6% next year. Although it trades on a relatively high price-to-earnings (P/E) ratio of 19.5, it does not appear to be overvalued based on its historic ratings. Therefore, there could even be scope for a greater premium over the wider index as a result of its mix of growth and defensive characteristics.

With dividends forecast to rise by 6.7% and being covered 2.6 times by profit, the company could become an increasingly attractive income play. As such, while it has a dividend yield of only 2%, now could be the right time to buy it for the long run.

The post 2 chances to make a million? appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Peter Stephens owns shares in Advanced Medical Solutions. The Motley Fool UK has recommended Advanced Medical Solutions. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In the half year to June alone, the company’s sales rose 8% year-on-year (y/y) in constant currency terms and 17% at actual exchange rates, to £45.9m. This growth was led by the company’s in-house designs, which grew by 15% y/y in constant currency terms, to £27.3m. This rapid increase in sales illustrates just how attractive AMS’ quality and value proposition is to customers and there’s good reason to believe this level of growth can be sustained for quite some time.

The key is the group’s rapid expansion into the US, which is the world’s largest medical market by value by some degree. Constant currency sales Stateside in H1 rose 32% to £9.1m as the company’s market share rose from 19% to 24%.

And unlike many AIM listed medical companies, AMS is both growing quickly and is already highly profitable. In H1, pre-tax profits rose 27% to £11.4m and operations generated £9.1m of cash flow. This increased the company’s cash reserves to £55.2m and supported a 17% hike in interim dividend payouts to 0.35p.

Now, AMS’ shares are highly priced at 33 times forward earnings but with large addressable markets, enviable margins and cash flow, plus a very healthy balance sheet, I still reckon the company and its stock have very attractive growth potential.

Everyone needs energy 

Another fast rising growth share I’ve got my eye on is independent energy supplier Yu Group (LSE: YU), whose shares are up in value over 14% this morning following H1 results. The group supplies electricity and gas to commercial customers and differentiates itself from competitors by having high levels of customer service, including individual account managers and entirely UK-based call centre agents.

So far, corporate customers have responded very well to this proposition, which was clear in the half year to June as revenue rocketed from £5m to £20.7m y/y. This rapid level of growth came from the company landing larger corporate customers as well using third party brokers in addition to its in-house sales staff.

The cost of third party brokers did dent profitability in the period with gross margins falling from 21% to 17.7% y/y. However, the company is still in very good shape and finally cash flow positive, with operations kicking off £1m in cash during the period. This kept the group’s cash balance level at £5.9m, which is critical as it needs cash on hand to serve as collateral when hedging its energy purchases.

Looking ahead, growth over the next few quarters looks to be very good. Given H1 revenue and booked revenue for H2, management expects at least £39m in revenue for 2017 as a whole and has already contracted £23.2m for 2018. Much of this growth is already baked into the company’s valuation of 18 times 2018 forecast earnings, but I still see plenty to like about this founder-led business over the long term.

The post 2 top growth shares that could make you brilliantly rich appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Ian Pierce has no position in any of the shares mentioned. The Motley Fool UK has recommended Advanced Medical Solutions. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Buying opportunity

Reporting on Tuesday was specialist healthcare company BTG (LSE: BTG). Its share price declined by over 7% following its final results, with a fall in profitability being the most likely cause of deteriorating investor sentiment. The company’s basic earnings per share were 45% down on the prior year, although on an adjusted basis they increased by 5%. BTG’s free cash flow continues to be relatively impressive, although it was 27% lower versus the prior year. However, with a cash balance of over £155m, it seems to be in a strong position through which to finance future growth.

The company’s broad portfolio continues to offer growth potential. Its acquisition of Galil Medical within the oncology space should provide a long-term boost to its financial performance. It has also made progress in its vascular division, where the use of the varicose veins treatment it offers has increased during the year. Further progress has been made in BTG’s pulmonology and specialty pharmaceuticals segments, which indicates that the company offers high growth potential.

In the next two years, BTG is expected to report a rise in its earnings of 39% and 14% respectively. Trading on a price-to-earnings growth (PEG) ratio of just 1.3, it seems to offer excellent value for money at the present time.

Robust growth

Also offering upbeat share price growth prospects is Advanced Medical Solutions (LSE: AMS). The advanced wound care and surgical dressings specialist has an excellent track record of delivering high growth. For example, in the last five years its bottom line has risen at an annualised rate of 12.4%, with growth delivered in each year. This shows that its business model and strategy are working well, with it offering a degree of stability and consistency which is relatively rare among smaller companies.

Looking ahead, Advanced Medical Solutions is expected to report a rise in earnings of 7% this year, followed by 11% next year. Although its shares currently trade on a price-to-earnings (P/E) ratio of 32.4, they appear to offer fair value for money. That’s because they have a relatively low positive correlation with the wider index, since the company’s earnings are not as affected by the performance of the wider economy as is the case for most of its index peers.

Certainly, there are cheaper stocks available within the healthcare space. However, few companies can offer the mix of stability and growth which Advanced Medical Solutions has right now. As such, it could prove to be a sound buy.

The post 2 super growth stocks I’d buy now appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Peter Stephens owns shares of Advanced Medical Solutions. The Motley Fool UK has recommended Advanced Medical Solutions and BTG. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Acquisitions and solid organic growth were a boon for Middle Eastern hospital provider NMC Health (LSE: NMC) in 2016 as revenue rose 38.6% year-on-year and EBITDA jumped 63.7%. This continues a solid run of success for the group and its shares have nearly doubled in the past year alone. But for those who have missed out on this rally, is now the time to begin a position?

The good news is that NMC, as the UAE’s largest private healthcare provider, is showing it can still grow despite the weak oil prices that have roiled the region. Offering top-notch care has been popular with customers in the country and total patient numbers rose 34.5% during the year while occupancy rates rose 80 basis points to 74.3%.

And these customers are highly profitable. Average revenue per patient rose 28.3% year-on-year and together with higher occupancy rates pushed EBITDA margins from the healthcare division up from 26.5% to 29.3%. This level of growth looks entirely sustainable as government health insurance requirements increase the potential pool of patients and the UAE’s economy continues to grow a solid 2%-3% per annum, despite low crude prices.

Would-be investors should also like that management has a laser-like focus on profitability and increased cash flow from $84.1m to $176.4m during the year. This helped push net debt down to 1.75 times EBITDA at $431m. With the balance sheet improving and small acquisitions in Saudi Arabia performing well, investors can also expect further expansion into similarly wealthy Gulf countries in the future.

The downside is that all this growth means lots of other investors have rushed to buy shares of the company, which now trade at 31 times forward earnings. This is a hefty premium, but if NMC can continue to post double-digit revenue and earnings growth, investors may find it a bargain.

A growth star closer to home

A similarly fast growing healthcare stock with broader appeal is healthcare specialist Advanced Medical Solutions (LSE: AMS). Shares of this tiny £480m market cap company have risen over 140% in the past five years as its wound care products have struck a cord with NHS doctors and their cost-conscious budget directors alike.

After finding success selling its wound closure and adhesive products at home and in Europe the company has recently made a major move into the massive American healthcare market. So far this is working out stupendously and an 83% leap in sales of its Liquiband product in the US in H1 helped boost overall group revenue 20% to £39.2m.

Liquiband has been an immense hit in the US and is already nearing management’s target of 20% market share. The company is now focused on increasing the range of products it offers in the US and if they’re as successful as Liquiband investors will be in for a treat.

With £41.1m in net cash, impressive operating margins of 24.3% and plenty of growth opportunities, AMS is a share to follow closely despite trading at a pricey 30.6 times forward earnings.

But is AMS the best growth stock you can buy today?

The post Should you buy this healthcare giant as FY earnings jump 60%? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Ian Pierce has no position in any shares mentioned. The Motley Fool UK has recommended Advanced Medical Solutions. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Investors have been selling off housing-related stocks at an astonishing clip since the EU Referendum vote, which makes the nearly 20% gain for shares of replacement window manufacturer Safestyle (LSE: SFE) since June 22 all the more impressive.

Even after this stellar performance, I reckon the future is still very bright for this £250m market cap minnow. Reason number one is that Safestyle is growing very quickly as it expands out of its traditional northern base into wealthier southern areas of the country. Over the latest half-year period to September the company enjoyed a 12.8% jump in year-on-year revenue as it installed more units and increased average order value by a full 9.1%.

Another bit of good news is that this rapid expansion isn’t overtaxing Safestyle’s balance sheet. Despite opening new sales offices in the south and commencing on an expansion to its current production facilities, the company actually increased its net cash position by more than 50% to £23.6m at the end of September. This increasing pile of cash and solid margins has allowed management to increase dividends enough that shares now offer a 3.47% annual yield.

Of course, you may be raising the very valid point that the health of the replacement window sector is inexorably tied to the health of the domestic housing market. That is true, but Safestyle is more recession-resistant than many believe due to the very fragmented nature of the market. During the last recession the company actually kept its total sales relatively flat by taking market share from smaller competitors. Safestyle is now the largest player in the market but with only 10% market share there’s definitely room to repeat this trick in any future recessions.

I’m not ready to buy shares just yet with valuations stretched to 15.6 times forward earnings, but Safestyle is definitely one of my small caps to watch in 2017.

US success

Another small cap growing at a rapid clip that I have my eye on is Advanced Medical Solutions (LSE: AMS). As AMS’s name suggests, it designs, manufactures and sells medical technologies with a focus on the wound care market. The company’s latest interim results saw revenue grow 20% year-on-year.

The biggest driver of this increase was an 83% rise in sales of its Liquiband wound adhesives in the US. Liquiband now has 19% market in the States but management is confident that it can continue to increase uptake among surgeons and hospital administrators who like the products’ impressive medical outcomes and relatively low costs. Its other products are only now beginning to achieve a foothold in the US, but if they can replicate Liquiband’s success, the company’s future is bright indeed.

AMS isn’t solely reliant on Liquiband or the US, though. Other major markets include Central Europe and the UK, where cash-strapped NHS systems have fallen head over heals for its products. The company also sells wound dressings, sutures and bulk products to a variety of customers.

Cutting-edge designs and a focus on costs helped improve operating margins to a stunning 24.2% at the end of June. Combined with stellar growth prospects and £41.1m of net cash on the balance sheet, AMS is definitely one to watch in 2017 despite a pricey 28 times forward P/E ratio.

The post 2 fast-growing small-cap shares at the top of my watchlist appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Ian Pierce has no position in any shares mentioned. The Motley Fool UK has recommended Advanced Medical Solutions. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Alliance Pharma

Alliance Pharma’s interim results show that it’s making strong progress following the acquisition of assets from Sinclair Pharma. They’ve contributed to a rise in half-year revenue of 104%, but even with their impact excluded Alliance Pharma’s top line rose by an impressive 6%. This contributed to an increase in pre-tax profit of 113%, which allowed Alliance Pharma to raise dividends by 10%. This puts it on a yield of 2.5%.

Looking ahead, Alliance Pharma has opportunities to expand its international capabilities. This will be made easier by the acquisition of products from Sinclair Pharma and Alliance Pharma now has a stronger foothold in the international space. It has particular growth potential in the EU and when combined with sterling’s weakness, it’s in a strong position.

In fact, Alliance Pharma is forecast to grow its earnings by 8% in the next financial year. This puts it on a forward price-to-earnings (P/E) ratio of just 11.8, which indicates that it offers a wide margin of safety as well as considerable upward rerating potential.

Advanced Medical Solutions

Also reporting today was Advanced Medical Solutions. Its sales increased by 17% at constant currency in the first half of its current year. It recorded good sales progress across all of its business units and made particularly strong progress in the US with its LiquiBand tissue adhesive range. In fact, LiquiBand’s sales increased by 83% and its market share by volume rose to 19% in the combined hospital and non-hospital market.

This strong performance caused Advanced Medical Solutions’ pre-tax profit to increase by 13% versus the previous period. It expects this performance to continue since the business is in robust health and its R&D programme provides significant innovation potential over the medium-to-long term.

Furthermore, Advanced Medical Solutions has the financial firepower to make acquisitions. They could boost profit growth, although in any case it’s forecast to increase earnings by 7% in each of the next two financial years. This puts it on a forward P/E ratio of 29.6 and while this may seem high, Advanced Medical Solutions has a very stable business model that has delivered profit growth in every one of the last five years. As a result, it offers a relatively low-risk outlook.

Looking Ahead

With the UK economy’s future being highly uncertain, investing in healthcare stocks such as Alliance Pharma and Advanced Medical Solutions makes sense. Both stocks are internationally focused and they offer excellent growth prospects in the long run. Crucially, they’re less dependent on the performance of the UK economy than is the case for most companies. Their gains of 12% (Alliance Pharma) and 29% (Advanced Medical Solutions) since the start of the year therefore look set to continue.

The post Are these 2 healthcare stocks ‘screaming buys’? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Peter Stephens owns shares of Advanced Medical Solutions and Alliance Pharma. The Motley Fool UK has recommended Advanced Medical Solutions. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

GlaxoSmithKline

For example, GlaxoSmithKline (LSE: GSK) is an exceptionally well-diversified business. It has three world-class divisions: consumer goods, vaccines and pharmaceuticals and this reduces its risk profile. It means that disappointment in one segment can be offset by strong performance elsewhere and with GlaxoSmithKline having a pipeline of around 40 potential treatments, the company offers excellent growth prospects, too.

In fact, it’s forecast to increase its earnings by 7% next year. This will boost its dividend coverage ratio, which will make its shareholder payouts more sustainable over the long run. On this topic, the company yields 4.7% from a dividend covered 1.3 times by profit. Although dividends aren’t due to rise over the next couple of years, beyond that GlaxoSmithKline’s growth potential indicates that shareholders will be rewarded through higher dividends in the long run.

Shire

While Glaxo offers top-notch income potential, Shire’s (LSE: SHP) yield of 0.4% holds little appeal for income seeking investors. However, this could change over the long run. A key reason for that is Shire’s combination with Baxalta, which is set to provide synergies and a more robust pipeline.

The deal is forecast to boost Shire’s bottom line, with growth of 18% forecast for next year. This puts Shire on a price-to-earnings growth (PEG) ratio of 0.7, which indicates that it offers strong growth at a very reasonable price.

This growth potential is set to catalyse Shire’s dividend payouts. They’re forecast to rise by 22% next year and while this doesn’t suddenly make Shire a top-notch income play, the fact that its dividends are covered 14.8 times by profit indicates that its shareholder payouts could be at the start of a period of significant growth.

Advanced Medical Solutions

As well as those two, Advanced Medical Solutions (LSE: AMS) is a worthy purchase right now. Its business model is very sound and consistent, with its focus on wound care providing a reliable financial outlook. In fact, in the last five years Advanced Medical Solutions has increased its earnings in every year, recording an annualised growth rate of 13% during the period.

Looking ahead, it’s expected to continue this growth with 7% forecast in each of the next two years. As with Shire, its yield of 0.4% lacks appeal for income-seeking investors, but with dividends being covered 8.2 times by profit, there’s scope for a rapid rise in shareholder payouts. As such, a 13% rise in dividends is due next year.

However, for investors who are only able to buy one of the three stocks discussed here, GlaxoSmithKline’s mix of growth and income marks it out as the most appealing buy for the long term.

The post Now is the perfect time to buy these 3 healthcare stocks! appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Peter Stephens owns shares of Advanced Medical Solutions and GlaxoSmithKline. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended Advanced Medical Solutions. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

One company that has stuttered somewhat on the growth front in recent years is AstraZeneca (LSE: AZN). In fact, its bottom line has fallen heavily as a loss of patents on key drugs has hurt sales, but with an acquisition programme set to deliver growth over the long run, AstraZeneca could become a more in-demand stock in the coming years.

While its growth rate has been disappointing in the past, AstraZeneca has remained a strong defensive play. It has a beta of 0.9 and with its earnings being less dependent on the wider economy than is the case for many of its index peers, the company’s shares could become more in demand. That’s especially the case if uncertainty surrounding the global economy increases and investors decide to adopt a more risk-off attitude in the coming months.

Growth and more growth

While AstraZeneca’s bottom line has fallen in recent years, Advanced Medical Solutions (LSE: AMS) has been able to record a rise in its earnings in each of the last five years. In fact, they’ve increased at an annualised rate of almost 13% during the period and looking ahead, further growth is on the horizon.

Certainly, a forecast of 3% earnings growth for the year to 31 December 2016 may be somewhat disappointing, but with an 8% increase forecast for next year, investor sentiment towards Advanced Medical Solutions could improve. That’s especially the case since its most recent annual results showed that it’s making good progress across all parts of its business. Notably, its LiquiBand tissue adhesive range recorded strong performance in the US, while its upbeat R&D product pipeline could allow it to deliver impressive earnings growth over the medium-to-long term.

Bright future

Meanwhile, Eco Animal Health (LSE: EAH) has delivered a stunning share price rise since the turn of the year. The animal pharmaceuticals specialist is up by 20%, at least partly due to multiple pieces of positive news flow regarding regulatory approval for the company’s products. They should provide Eco Animal Health with improved profit growth prospects in future years, with its forecasts for the next two years indicating that further share price rises are on the horizon.

For example, Eco Animal Health is expected to record a rise in its bottom line of 19% in the current year, followed by a further increase of 18% next year. These figures have the potential to cause a step change in investor sentiment towards Eco Animal Health and with its shares trading on a price-to-earnings growth (PEG) ratio of just 1.3, there’s significant upside potential on offer.

The post Are AstraZeneca plc, Eco Animal Health Group plc and Advanced Medical Solutions Group plc the top healthcare picks right now? appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Advanced Medical Solutions, AstraZeneca, and ECO Animal Health Group. The Motley Fool UK has recommended AstraZeneca. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.