Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

1 Healthcare Stock with Exciting Potential and 2 We Question

CNMD Cover Image

From novel pharmaceuticals to telemedicine, most healthcare companies are on a mission to drive better patient outcomes. But speed bumps such as inventory destockings have persisted in the wake of COVID-19, limiting growth. This has capped the upside for healthcare stocks lately as the industry’s flat return over the past six months has trailed the S&P 500’s 18.6% gain.

Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. With that said, here is one healthcare stock boasting a durable advantage and two we’re swiping left on.

Two Healthcare Stocks to Sell:

CONMED (CNMD)

Market Cap: $1.41 billion

With over five decades of experience in surgical innovation since its founding in 1970, CONMED (NYSE: CNMD) develops and manufactures medical devices and equipment for surgical procedures, specializing in orthopedic and general surgery products.

Why Is CNMD Not Exciting?

  1. Smaller revenue base of $1.33 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
  2. Low returns on capital reflect management’s struggle to allocate funds effectively

CONMED’s stock price of $45.67 implies a valuation ratio of 10.1x forward P/E. Check out our free in-depth research report to learn more about why CNMD doesn’t pass our bar.

Progyny (PGNY)

Market Cap: $1.84 billion

Pioneering a data-driven approach to family building that has achieved an industry-leading patient satisfaction score of +80, Progyny (NASDAQ: PGNY) provides comprehensive fertility and family building benefits solutions to employers, helping employees access quality fertility treatments and support services.

Why Does PGNY Worry Us?

  1. Smaller revenue base of $1.24 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
  2. Estimated sales growth of 4.8% for the next 12 months implies demand will slow from its two-year trend
  3. ROIC of 0.6% reflects management’s challenges in identifying attractive investment opportunities

At $21.42 per share, Progyny trades at 12.8x forward P/E. Read our free research report to see why you should think twice about including PGNY in your portfolio.

One Healthcare Stock to Watch:

Humana (HUM)

Market Cap: $30.7 billion

With over 80% of its revenue derived from federal government contracts, Humana (NYSE: HUM) provides health insurance plans and healthcare services to approximately 17 million members, with a strong focus on Medicare Advantage plans for seniors.

Why Do We Like HUM?

  1. Products and services resonate with customers, evidenced by its respectable 11.8% annualized sales growth over the last five years
  2. Dominant market position is represented by its $123.1 billion in revenue, which gives it negotiating power over membership pricing and reimbursement rates
  3. Industry-leading 49% return on capital demonstrates management’s skill in finding high-return investments

Humana is trading at $257.25 per share, or 17.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

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