Analyst ratings are a great start when searching for companies with exciting prospects, but finding companies with bullish ratings from analysts with a history of predicting stock performance is even better.
Using analyst ratings from Reuters that are presented on a linear scale (with 1 = "Strong Buy" and 5 = "Strong Sell"), we sliced the ratings data of stocks from the healthcare sector into three monthly time periods, and identified the groups of analysts that have shown predictive value over two consecutive time periods.
We further narrowed down the list by only focusing on those stocks that have seen bullish trends in recent analyst opinion.
Although past performance is no guarantee of future results, the recent accuracy of these analyst ratings suggests their opinions may be a helpful starting-off point for your own analysis.
?Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.?
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We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
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Do you think these stocks will outperform like analysts expect? Use this list as a starting point for your own analysis.
List sorted by market cap.
1. Johnson & Johnson (JNJ): Engages in the research and development, manufacture and sale of various products in the healthcare field worldwide. Market cap of $172.54B. Mean average rating changed from 2.08 to 2.12 between 09/15/11 and 10/15/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -2.48%.
Analysts also got it right between 10/15/11 and 11/14/11, with the mean rating changing from 2.12 to 2.08 (bullish change). Over the following month, the stock generated an alpha of 0.53% relative to the S&P 500 index, as predicted by analysts. This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.08 to 2.07 between 11/14/11 and 12/14/11 (i.e. bullish change).
Offers a good dividend, and appears to have good liquidity to back it up - dividend yield at 3.61%, current ratio at 2.46, and quick ratio at 2.17. The stock has gained 4.65% over the last year.
2. Boston Scientific Corporation (BSX): Develops, manufactures and markets medical devices used in various interventional medical specialties worldwide. Market cap of $7.60B. Mean average rating changed from 2.68 to 2.62 between 09/15/11 and 10/15/11 (bullish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 0.98%.
Analysts also got it right between 10/15/11 and 11/14/11, with the mean rating changing from 2.62 to 2.65 (bearish change). Over the following month, the stock generated an alpha of -8.97% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.65 to 2.64 between 11/14/11 and 12/14/11 (i.e. bullish change).
The stock is currently stuck in a downtrend, trading 7.54% below its SMA20, 9.73% below its SMA50, and 22.92% below its SMA200. It has been a rough couple of days for the stock, losing 8.23% over the last week.
3. Curis Inc. (CRIS): Focuses on the research and development of cancer therapeutics. Market cap of $306.32M. Mean average rating changed from 1.6 to 1.5 between 09/15/11 and 10/15/11 (bullish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 10.53%.
Analysts also got it right between 10/15/11 and 11/14/11, with the mean rating changing from 1.5 to 1.44 (bullish change). Over the following month, the stock generated an alpha of 10.43% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 1.44 to 1.4 between 11/14/11 and 12/14/11 (i.e. bullish change).
The stock is a short squeeze candidate, with a short float at 7.39% (equivalent to 15.19 days of average volume). Exhibiting strong upside momentum - currently trading 11.83% above its SMA20, 12.48% above its SMA50, and 15.29% above its SMA200. The stock has had a couple of great days, gaining 8.4% over the last week.
*Ratings sourced from Reuters, price data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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