The past year hasn't been kind to the stocks featured in this article. Each has tumbled to their lowest points in 12 months, leaving investors to decide whether they're witnessing fire sales or falling knives.
While market timing can be an extremely profitable strategy, it has burned many investors and requires rigorous analysis - something we specialize in at StockStory. That said, here is one stock poised to prove the bears wrong and two where the skepticism is well-placed.
Two HealthcareStocks to Sell:
Tandem Diabetes (TNDM)
One-Month Return: -22.2%
With technology that automatically adjusts insulin delivery based on continuous glucose monitoring data, Tandem Diabetes Care (NASDAQ: TNDM) develops and manufactures automated insulin delivery systems that help people with diabetes manage their blood glucose levels.
Why Are We Out on TNDM?
- Disappointing pump shipments over the past two years suggest it might have to lower prices to accelerate growth
- Earnings per share fell by 37.4% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Tandem Diabetes’s stock price of $15.59 implies a valuation ratio of 26.7x forward EV-to-EBITDA. If you’re considering TNDM for your portfolio, see our FREE research report to learn more.
Chemed (CHE)
One-Month Return: -16.7%
With a unique business model combining end-of-life care and household services, Chemed (NYSE: CHE) operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.
Why Does CHE Worry Us?
- Muted 4.6% annual revenue growth over the last five years shows its demand lagged behind its healthcare peers
- Free cash flow margin shrank by 8.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Diminishing returns on capital suggest its earlier profit pools are drying up
Chemed is trading at $459.91 per share, or 17.8x forward P/E. To fully understand why you should be careful with CHE, check out our full research report (it’s free).
One Healthcare Stock to Buy:
Molina Healthcare (MOH)
One-Month Return: -23.7%
Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE: MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.
Why Is MOH a Good Business?
- Market share has increased this cycle as its 19.4% annual revenue growth over the last five years was exceptional
- Scale advantages are evident in its $41.87 billion revenue base, which provides operating leverage when demand is strong
- Earnings per share grew by 14.5% annually over the last five years and trumped its peers
At $221.39 per share, Molina Healthcare trades at 8.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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