We recently compiled a list of 7 cheap new stocks to invest in now. In this article, we'll take a look at how GE Healthcare Technologies (NASDAQ:GEHC) stands compared to other cheap new stocks.
Capital markets are in turmoil due to Fed interest rate cuts
Recent Fed decisions have sparked optimism about increased capital market activity. Analysts have expressed increasing confidence that the economy will have a soft landing despite continued market volatility. This perspective suggests that supportive monetary policy can boost valuations and create favorable conditions for investment, creating opportunities for companies to pursue IPOs and M&A. Investor interest in high-tech startups and growth-oriented companies may increase as borrowing costs fall. This is especially true considering the recent performance of the S&P 500. The S&P 500 has recovered from its previous decline, demonstrating the market's resilience.
As the end of the year approaches, a combination of lower interest rates and positive economic data could lead to a surge in IPOs and increased market engagement. Investors may seek to diversify their portfolios by exploring new opportunities in emerging technology companies, for example, as these companies take advantage of a favorable economic backdrop, leading to increased capital market activity. This may lead to The current situation presents an encouraging scenario for both established and young companies looking to enter the public markets or expand through strategic alliances, so read Stephanie Link's take on this scenario by reading What Young Companies Should Buy Now? It was featured in an article about the top 10 stocks. Link, chief investment strategist and portfolio manager at Hightower, highlighted contrasting perspectives amid market volatility and uncertainty. Here is an excerpt from the article:
“…she believes the Fed is skillfully guiding the economy to a soft landing despite expected market volatility ahead of the election.
Just three weeks ago, the S&P 500 was down 4%. Still, it rebounded 4% the following week. It rose another 1% last week, hitting a new all-time high, as the market slumped, citing better-than-expected economic growth on recent data, including improved retail sales and manufacturing statistics, and lower sales. expressed optimism about purchasing opportunities during the period. Weekly jobless claims fell to a four-month low. This positive economic backdrop supports an estimated growth rate of 2.9% and is expected to be positive for corporate earnings.
…Link cited growing market trends over the past few months, noting that while technology is taking the lead, other sectors such as financials, industrials, materials and discretionary stocks are also showing strength. He pointed out that it shows. She advised investors to be careful in their choices amid continued volatility…''
the story continues
On October 3, Pivotal Advisors CEO and CIO Tiffany McGee emphasized the convergence of macro events that can cause market volatility, emphasizing the concept of “convergence” as the word of the day. did. He noted that this week has seen a concentration of significant events that could lead to increased volatility in the short term. Tiffany stressed that macroeconomic factors are at play, including the possibility of a port strike and major employment figures due to be released.These factors are creating what he describes as a “perfect storm”. .
Tiffany pointed to the ongoing conflict in the Middle East and the recent vice presidential debate as key factors influencing market reaction. He said bond prices experienced a sharp decline earlier in the week but stabilized as investors sought safety amid rising geopolitical tensions. She expects these developments to create further instability in the short term as the election approaches.
From a strategic perspective, Tiffany encouraged investors to reevaluate their portfolios, especially those focused on stocks. With the S&P 500 index up 20% year-to-date and sectors such as technology and consumer staples performing well, now is a good time to consider stripping away some of your gains and reallocating those funds to other areas of the market. He suggested that.
Tiffany also talked about the mutual fund he chose to invest in, under the ticker AISGS, which is currently outperforming small-cap stocks. She expressed that she would like to focus on scale and style rather than specific areas at this time. By investing in small- and mid-cap stocks through active management such as Aerial Fund (ARGFX), investors can take advantage of the opportunities created by lower analyst coverage in these segments. This lack of information allows skilled managers to identify undervalued stocks and consistently outperform the index.
Tiffany's insights highlight the importance of strategic asset allocation and active portfolio management during times of increased market volatility. Recognizing the convergence of macroeconomic events and adjusting investment strategies accordingly can help investors navigate potential market fluctuations while positioning themselves for future opportunities.
methodology
We used the Finviz stock screener to create a list of 20 stocks that have recently gone public over the past two years and have a forward P/E ratio below 20. We then selected seven undervalued new stocks that are most popular among elite hedgers. Funds and analysts were bullish. Stocks are ranked by the number of hedge funds that own the stock as of Q2 2024.
Why are we interested in stocks that hedge funds invest in? The reason is simple. Our research shows that by mimicking the top stock picks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 points (Learn more here Please take a look).
A radiologist examining a patient's CT scan in the laboratory.
GE Healthcare Technologies Corporation (NASDAQ:GEHC)
Forward price/earnings ratio: 19.8
Market capitalization as of October 1: $42.86 billion
Number of hedge fund holders: 49 people
GE HealthCare Technologies Inc. (NASDAQ:GEHC) is a medical technology company that was spun off from General Electric on January 4, 2023. The company delivers integrated care solutions that generate actionable insights across health systems and care pathways to enable better clinical and financial outcomes. result. AI-powered diagnostic imaging tools, such as Edison True PACS, have increased efficiency for radiologists and driven revenue growth in healthcare.
As healthcare providers upgrade their equipment in areas such as MRI, CT and ultrasound, the company is poised to benefit. We are also expanding our digital health solutions, including AI-powered analytics and cloud-based services, to improve patient care and operational efficiency in an environment where telemedicine is increasingly valued. Strategic partnerships within the healthcare ecosystem strengthen its capabilities and further drive innovation.
The company won approximately $800 million in contracts for medical devices, software, and services in the U.S. market in the second quarter of 2024. In July, it acquired the AI division of Intelligent Ultrasound, which specializes in ultrasound AI for women's health, and partnered with AWS to develop foundational models and GenAI tools.
Sales increased 0.46% year-over-year in the second quarter due to increased demand for medical imaging and monitoring technology, particularly for hospitals and outpatients. All segments contributed, with organic revenue up 1% and orders up 3%. Global sales growth excluding China was 4% and order growth was 6%.
GE Healthcare Technologies (NASDAQ:GEHC) is growing market share through equipment upgrades, digital health investments, and strategic partnerships. The company's focus on sustainability and alignment with market trends makes it a promising investment.
Cooper Investors Global Equity Fund said the following about GE Healthcare Technologies, Inc. (NASDAQ:GEHC) in its Q2 2024 investor letter:
“However, we want to focus on the other Stalwarts and Growth businesses we own, which should deliver greater returns than the hardware manufacturers currently enjoying their early build-out stages. In the words of Salesforce CEO Marc Benioff, if hardware is GenAI's picks and shovels, data is its gold.
Another example is GE HealthCare Technologies Inc. (NASDAQ:GEHC), a global leader in diagnostic imaging equipment across multiple modalities. AI algorithms improve image quality and computer vision assists in image analysis, making the device more accessible to new users. The next stage will be data-driven. GEHC accumulates large amounts of data across pathology, genomics, and imaging through many points of entry into the patient journey. Leveraging AI tools across that data to improve patient outcomes should enable a more competitive product offering to increase sales, margins, and revenue. ”
Overall, GEHC ranks #2 on our list of cheap new stocks to invest in. While we recognize GEHC's potential as an investment, we believe AI stocks have great potential to deliver high returns and do so in a shorter period of time. . If you're looking for AI stocks with more promise than GEHC, but trading at less than 5x earnings, check out our report on the cheapest AI stocks.
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Disclosure: None. This article was originally published on Insider Monkey.
