The medical industry is expected to thrive due to rising chronic diseases, an aging population, increased health awareness, rapid medication discovery, and technical advancements and trends. Moreover, government initiatives supporting the people are projected to help millions to overcome financial barriers and find proper treatments.

Furthermore, the industry’s growth is expected to be driven by expanding demand for home healthcare, rising disposable income, and advancements in home-care technologies. The home healthcare market is estimated to grow at a CAGR of 3.1% until 2033.

In addition, medical companies enjoy stable demand for their products and services irrespective of the macroeconomic scenario. Therefore, investors could consider buying quality medical stock, Nature’s Sunshine Products, Inc. (NATR - Get Rating). However, SNDL Inc. (SNDL - Get Rating) might be best avoided, considering its weak fundamentals.

Stock to Buy:

Nature’s Sunshine Products, Inc. (NATR - Get Rating)

Natural health and wellness company NATR primarily manufactures and sells nutritional and personal care products in Asia, Europe, North America, Latin America, and internationally.

NATR’s forward EV/Sales of 0.37x is 78.4% lower than the industry average of 1.72x. Its forward Price/Sales of 0.44x is 62% lower than the industry average of 1.19x.

NATR’s trailing-12-month gross profit margin of 71.59% is 127% higher than the industry average of 31.53%. Its trailing-12-month ROTA of 4.96% is 33% higher than the industry average of 3.73%.

NATR’s selling, general, and administrative expenses came in at $36.79 million for its third quarter ended September 30, 2022, down 6.9% year-over-year. Its total current liabilities came in at $63.89 million for the period ended September 30, 2022, compared to $76.67 million for the period ended December 31, 2021.

NATR’s revenue is expected to rise marginally year-over-year to $420.61 million in 2023. Its EPS is estimated to grow 280% year-over-year to $0.18 in 2023. Over the past three months, the stock has gained 10.1% to close the last trading session at $9.88.

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

NATR has an A grade for Value and Quality and a B for Stability and Sentiment. In the B-rated Medical – Consumer Goods industry, it is ranked first out of 9 stocks. Click here for the additional POWR Ratings for Growth and Momentum for NATR.

Stock to Avoid:

SNDL Inc. (SNDL - Get Rating)

Headquartered in Calgary, Canada, SNDL engages in the production, distribution, and sale of cannabis products, operating through the Cannabis Operations and Retail Operations segments.

SNDL’s trailing-12-month gross profit margin of 19.07% is 65.6% lower than the 55.48% industry average. Its trailing-12-month net income margin of negative 54.54% compares to the negative 5.61% industry average.

SNDL’s net loss for the fiscal third quarter that ended September 30, 2022, came in at C$98.84 million ($74.04 million) compared to the net earnings of C$16.71 million ($12.51 million) in the prior-year quarter. Its loss from operations came in at C$88.54 million ($66.32 million), up 365% year-over-year.

Also, its current asset came in at C$526.03 million ($394.01 million) for the period that ended September 30, 2022, compared to C$728.18 million ($545.42 million) for the period that ended December 31, 2021.

Analysts expect SNDL’s EPS to be negative $0.06 in 2023. The company missed EPS estimates in each of the trailing four quarters. Over the past month, the stock has lost 66.1% to close the last trading session at $2.07.

SNDL has an overall rating of D, which equates to Sell in our POWR Ratings system.

The stock has an F grade for Momentum and Stability and a D for Sentiment. In the D-rated Medical – Pharmaceuticals industry, SNDL is ranked #139 out of 174 stocks. For additional SNDL ratings for Growth, Value, and Quality, click here.

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NATR shares were trading at $9.88 per share on Monday afternoon, up $0.24 (+2.49%). Year-to-date, NATR has gained 18.75%, versus a 6.49% rise in the benchmark S&P 500 index during the same period.

About the Author: Rashmi Kumari

Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions. More...

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