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2 Healthcare Stocks Under $5 Rated 'Buy' in the POWR Ratings

With the continued spread of the COVID-19 Delta variant in several parts of the world, the healthcare industry continues to command investors’ attention. The industry is also expected to continue growing on the rising demand for treatments for chronic diseases. Thus, we think it could be wise to bet on quality healthcare stocks Global Cord Blood (CO) and So-Young International (SY), which are trading at less than $5 per share. These names are also rated ‘Strong Buy’ or ‘Buy’ in our proprietary POWR Ratings system. Read on.

Governments worldwide have been investing heavily in their healthcare systems to prevent or more effectively combat COVID-19 pandemic-like situations. Rising chronic diseases are also boosting the demand for healthcare solutions. These tailwinds are of import to Investors, whose interest in the healthcare stocks is evidenced by the Health Care Select Sector SPDR Fund’s (XLV) 16.2% year-to-date returns.

As China warns of the further spread of coronavirus, the healthcare industry will likely continue enjoying the market’s attention. Indeed, according to a Business Wire report, the global healthcare market is expected to reach $11.91 trillion by 2022.

So, we think it could be wise to bet on international healthcare stocks Global Cord Blood Corporation (CO) and So-Young International Inc. (SY), which are trading at less than  $5 but possess sound fundamentals. Furthermore, these stocks are rated ‘Strong Buy’ or ‘Buy’ in our proprietary POWR Ratings system.

Click here to checkout our Healthcare Sector Report for 2021

Global Cord Blood Corporation (CO)

Based in Hong Kong, CO and its subsidiaries provide umbilical cord blood storage and ancillary services. The company operates three cord blood banks in the Beijing municipality, the Guangdong province, and the Zhejiang province.

On August 30, 2021, Ting Zheng, CO Chairperson and CEO, said, “We recorded 19,673 new subscribers during the first quarter of fiscal 2022, as China’s approach largely kept COVID-19 under control and consumer concerns gradually alleviated.”

CO’s net revenue increased 12.2% year-over-year to $48.81 million in its fiscal first quarter, ended June 30, 2021. Its gross profit came in at $41.41 million, up 12.6% year-over-year. While its net income increased 3% year-over-year to $21.13 million, its EPS came in at $0.17, up 2.8% year-over-year. Over the past nine months, the stock has gained 8.2% in price to close yesterday’s trading session at $4.37.

CO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

CO has an A grade for Quality, and a B grade for Value, Stability, and Sentiment. Within the Medical - Diagnostics/Research industry, it is ranked #3 out of 58 stocks. Click here to see the additional POWR Ratings for Growth and Momentum for CO.

So-Young International Inc. (SY)

Headquartered in Beijing, China, SY operates an online platform for medical aesthetics and consumption healthcare services focused on discretionary medical treatments. It has approximately 6,900 medical aesthetic service providers and 4,200 other consumption healthcare service providers.

On June 28, 2021, SY agreed with Wuhan Miracle Laser Systems, Inc. and Wuhan Zeqi Technology Co., Ltd., a shareholder of Wuhan Miracle, to acquire a controlling interest in Wuhan Miracle. Xing Jin, SY’s Chairman and CEO, said, "We hope our strategic investment in Wuhan Miracle will enable us to continue to seize the opportunities of the industry and bring greater returns to our shareholders."

SY’s revenues increased 37.7% year-over-year to $69.98 million for the second quarter, ended June 30, 2021. Its gross profit increased 41.6% year-over-year to $60.87 million. Also, its net income increased 2,591.3% year-over-year to $8.92 million, while its EPS came in at $0.08, representing a 2,550% year-over-year rise.

For its fiscal year 2021, SY’s revenue and EPS are expected to grow 36.5% and 161.5% year-over-year to $275.24 million and $0.34, respectively. Over the past month, the stock has gained 3.3% to close yesterday’s trading session at $4.38.

SY’s strong fundamentals are reflected in its POWR ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system.

In addition, it has an A grade for Value and Sentiment, and a B grade for Growth and Quality. SY is ranked #4 of 86 stocks in the Medical - Services industry. Click here to see the additional POWR Ratings for SY (Stability and Momentum).

Click here to checkout our Healthcare Sector Report for 2021


CO shares were trading at $4.28 per share on Tuesday morning, down $0.09 (-2.06%). Year-to-date, CO has gained 15.36%, versus a 23.55% rise in the benchmark S&P 500 index during the same period.



About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

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