The market has witnessed a two-day relief rally as major stocks market indexes moved into positive territory, driven by the Federal Reserve’s signal that it will maintain its ultra-easy monetary policy for now. But the indexes are in the red at the time of writing this article because investors fear that the Chinese real-estate developer Evergrande’s debt crisis could lead to global financial contagion. Furthermore, a decline in consumer confidence and an uptick in jobless claims have compounded the concerns. But, ironically, the stock market’s volatility has created an ideal situation for long-term investors to buy quality stocks at low prices.
Financial planner Philip Chao, principal and chief investment officer at Experiential Wealth in Cabin John, Md., believes that “buying the dip” has been a successful strategy for a long time because stocks bought during their downturns enable investors to reap rewards when there is a rebound.
Corcept Therapeutics Incorporated (CORT), NextGen Healthcare, Inc. (NXGN), and Core Molding Technologies, Inc. (CMT) have suffered price declines recently but we think possess solid rebound prospects. So, it could be wise to scoop up their shares now.
Corcept Therapeutics Incorporated (CORT)
CORT is a pharmaceutical company that provides solutions to various endocrine, metabolic, oncologic, psychiatric, and ophthalmologic diseases. The Menlo Park, Calif., company also researches and develops selective glucocorticoid receptor (GR) antagonists. Also, Korlym (mifepristone) tablets, the company’s key product, are used to treat hyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing’s syndrome.
This month, CORT announced positive results for the Phase 2 trial of its relacorilant plus nab-paclitaxel, which was featured at the European Society of Medical Oncology (ESMO). This trial clearly illustrated that women with recurrent platinum-resistant ovarian cancer should benefit from receiving relacorilant without any side effects. Also, CORT plans to begin its Phase 3 trial in the first quarter of next year.
CORT’s revenues increased 3.4% year-over-year to $91.59 million in the second quarter ended June 30, 2021. The company’s income from operations came in at $31.94 million for the quarter. In addition, its net income amounted to $26.52 million, while its EPS came in at $0.21 during this period.
Analysts expect CORT’s revenue for its fiscal year 2022 to be $427.62 million, representing14.7% growth year-over-year. Its EPS is expected to grow 19.5% next year.
The stock has gained 20.1% in price over the past year. However, it is currently trading below its 50-day and 200-day moving averages of $20.84 and $23.58, respectively. Also, it is currently trading 34.3% below its 52-week high of $31.18, which it hit on August 2, 2021. In addition, CORT has declined 21.7% in price year-to-date.
CORT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
The stock has an A grade for Value and Quality. We’ve also graded CORT for Stability, Sentiment, Momentum, and Growth. Click here to access all of CORT’s ratings.
CORT is ranked #3 of 504 stocks in the Biotech industry.
NextGen Healthcare, Inc. (NXGN)
NXGN offers ambulatory healthcare services, integrated health IT solutions, and specialty-specific content to meet clinical and financial goals. The Irvine, Calif.-based company also provides the flexibility and efficiency required to adapt to changes in the industry, new technology, consumer expectations, regulatory requirements, and unforeseen events.
This month, NXGN partnered with Client Healthcare and Care Resource Community Health Centers, Inc., in South Florida, to purchase the NextGen Patient Experience Platform to improve patient satisfaction scores and health outcomes. NXGN should be able to personalize the patient and provider experience with dynamic engagement solutions and extend this connection with better outcomes through this partnership.
During its fiscal first quarter, ended June 30, 2021, NXGN’s total revenues increased 11.6% year-over-year to $146.08 million. The company’s gross profit grew 13.7% from its year-ago value to $73.34 million. Its income from operations rose 98.9% from the prior-year quarter to $3.73 million. Also, the company’s net income was $2.85 million, compared to a $824,000 net loss in its fiscal first quarter of 2020.
NXGN’s revenue is expected to increase 4.6% year-over-year to $582.33 million in its fiscal year 2022. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of the four trailing quarters. Its EPS is expected to increase 8.7% next year. The stock has gained 21.6% in price over the past year.
The stock is currently trading below its 50-day and 200-day moving averages of $15.53 and $17.84, respectively. In addition, it is trading 38.2% below its 52-week high of $23.8, which it hit on January 26, 2021. CMT’s stock price has declined 19.3% year-to-date.
NXGN’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. Also, the stock has a B grade for Growth, Quality, and Stability.
In addition to the POWR Rating grades I’ve just highlighted, one can see NXGN’s ratings for Value, Momentum, and Sentiment here. The stock is ranked #2 of 85 stocks in the Medical – Services industry.
Core Molding Technologies, Inc. (CMT)
Incorporated in 1996, CMT manufactures sheet molding compounds (SMC) that mold fiberglass reinforced plastics. The Columbus, Ohio, company specializes in large-format moldings and produces plastic composites, such as shielding, vehicle roofs, and hoods. Also, CMT serves medium- and heavy-duty trucks, marine, automotive, agriculture, construction, and other markets in the United States, Mexico, Canada, and internationally.
In May, CMT partnered with Toledo Technology Academy to build parts for a prototype electric vehicle (EV). Through this partnership, the company should gain an opportunity to develop next-generation engineering and manufacturing leaders.
CMT’s total net sales increased 112.8% year-over-year to $80.46 million for the second quarter, ended June 30, 2021. The company’s gross margin grew 373.2% from its year-ago value to $13.74 million. Its operating income came in at $6.17 million, versus a $1.21 million operating loss in the second quarter of 2020. Also, the company’s net income amounted to $4.09 million, compared to a $2.27 million net loss in the prior-year quarter.
CMT’s stock price has surged 27.3% over the past year. However, the stock is currently trading below its 50-day and 200-day moving averages of $14.03 and $13.26, respectively. Moreover, it is trading 32.6% below its 52-week high of $17.35, which it hit on July 2, 2021. CMT’s stock price has declined 16.9% so far this year.
It’s no surprise that CMT has an overall A rating, which equates to a Strong Buy in our POWR Rating system. Also, the stock has an A grade for Growth and Value.
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CORT shares were trading at $20.29 per share on Friday afternoon, down $0.20 (-0.98%). Year-to-date, CORT has declined -22.44%, versus a 19.95% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...
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