Today's IBD 50 Stocks to Watch pick is Cross Country Healthcare. The health care stock has formed a fresh buy point as the firm seeks to modernize the health-care staffing process with a new digital platform.
Cross Country Healthcare, which provides temporary physicians and travel nurses for doctors offices and hospitals, hit a new high of 30.51 in July as the stock barely rose above a cup-base buy point of 30.50. Following the move on July 21, shares immediately plunged the next day.
But now the health care stock has formed a cup-with-handle base, which shows an entry of 27.87. Cross Country remains 10% below the buy point as shares test support at their 50-day moving average and 21-day exponential moving average. The pullback forming the handle has taken shape in lighter volume, which is a good sign.
Investors want to see a bounce from the moving averages, ideally in strong volume.
Health care stocks have struggled in recent weeks alongside the overall market. The S&P Healthcare ETF was flat on Tuesday afternoon, following three straight down weeks. The recent sell-off has put the ETF below its 50-day and 200-day lines.
However, Cross Country still has several positive marks. An Accumulation/Distribution Rating of B+ shows the stock is under accumulation by major institutions. Also, Cross Country presents top-notch IBD Ratings, including a perfect 99 EPS Rating, a 97 Composite Rating and a 95 Relative Strength Rating.
Health Care Stock: CCRN Launches New Digital Platform
Boca Raton, Fla.-based Cross Country Healthcare was one of the few growth stocks that benefited from the pandemic as demand for medical professionals soared. Full-year EPS in 2020 and 2021 skyrocketed. In 2019, the health care stock reported a bottom line of 15 cents a share. That figure jumped to 46 cents in 2020 and $3.06 in 2021.
Analysts expect earnings to rise another 53% in 2022 to $4.69 a share.
The health care company has averaged earnings growth of 359% over the past four quarters and surprised investors on Aug. 3, beating estimates by a decent margin. Analysts expected second-quarter earnings of $1.35 per share, but the company reported $1.40 per share on $753.5 million in revenue.
Thanks to strong growth in both its physician staffing and nurse staffing business segments, Cross Country raised its revenues significantly from last year. Additionally, its acquisition of California-based Workforce Solutions Group in June 2021 resulted in increased staffing volume.
On Tuesday, the firm also announced the launch of its new digital platform, which helps health care professionals find and engage with potential job opportunities more effectively. The firm's new digital approach seeks to modernize the staffing process for health care systems with more effective candidate sourcing options. It could boost the health care stock.
Investing Heavily In Tech
"Cross Country is continuing to invest heavily in technologies that ensure speed to market and a best-in-class experience," CEO John A. Martins said in today's news release announcing the launch. "With health care professionals at the forefront of the industry, our focus has long been to provide the best possible experience, placing the best candidates in the ideal clinical setting to fulfill their personal and professional goals."
Keep in mind that the stock market is uncertain, which poses a risk for stock purchases. That would include health care stock Cross Country, even if it tops its buy point.
