Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Healthcare Facilities & Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Healthcare Facilities & Services Stock News

Before choosing which top Healthcare Facilities & Services stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

Our fundamental outlook for health care facilities (primarily hospitals) industry over the next 12 months is neutral. Widespread distribution of vaccines in the first half of 2021 is helping Covid-19 counts come down. This is likely to alleviate some of the pressure’s hospitals have been facing with staffing difficulties and PPE shortages. In addition, elective procedure volumes, a key source of profitability, are likely to continue to recover as hospitals as patients become more comfortable returning to postponed doctors’ appointments and get diagnoses again. At the same time, the combination of Covid-19 and the global response to it also recently led to a massive increase in U.S. unemployment. We expect the elevated unemployment (5.8% as of May 2021) to negatively impact health facilities, primarily by 1) increasing bad debt expense and charity care as well as by 2) lowering elective procedure volumes for the uninsured. Yet, demand for hospital services will likely remain relatively insulated in a recession when compared to many other industries. On the negative side, however, the Hospital Price Transparency rule went into effect January 1, 2021, which releases competitive information about payer-negotiated rates for common services and has led to negative headlines as many health care facilities try to make finding this data on their websites difficult. The federal government has passed a series of stimulus bills to address Covid-19’s impact. The bills provided $178 billion to health care providers through the Provider Relief Fund, in addition to Medicare and Medicaid provisions. This includes payments for uninsured patients, a 20% boost to Medicare rates on Covid-19 cases, and sweeping reimbursement increases, which should significantly aide hospitals.

Why Focus on Undervalued Healthcare Facilities & Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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3 Undervalued Healthcare Facilities & Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Healthcare Facilities & Services industry for Wednesday, February 07, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Healthcare Facilities & Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

AMN Healthcare Services, Inc.’s Value Grade

Value Grade:

AMN Healthcare Services Inc is a provider of healthcare total talent solutions to healthcare facilities across the nation. The Company provides unparalleled access to a comprehensive network of healthcare professionals. The Company's nurse and allied solutions segment includes the Company's travel nurse staffing, labor disruption staffing, local staffing, international nurse and allied permanent placement, allied staffing and revenue cycle solutions businesses. The Company's physician and leadership solutions segment includes the Company's locum tenens staffing, healthcare interim leadership staffing, executive search, and physician permanent placement businesses. Its technology and workforce solutions segment includes the Company's language services, vendor management systems, workforce optimization, virtual care, and outsourced solutions businesses. The Company operates Medical Search International and DRW Healthcare Staffing.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

AMN Healthcare Services, Inc. has a Value Score of 80, which is considered to be undervalued.

When you look at AMN Healthcare Services, Inc.’s price-to-sales ratio at 0.70 compared to the industry median at 1.14, this company has a lower price relative to revenue compared to its peers. This could make AMN Healthcare Services, Inc.’s stock more attractive for value investors.

AMN Healthcare Services, Inc.’s price-earnings ratio is 10.93 compared to the industry median at 24.67. This means it has a lower share price relative to earnings compared to its peers. This could make AMN Healthcare Services, Inc. more attractive for value investors.

Now, let’s assess AMN Healthcare Services, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 7.2, when compared to the industry median of 12.2, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. AMN Healthcare Services, Inc.’s shareholder yield is higher than its industry median ratio of (1.85%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. AMN Healthcare Services, Inc.’s price-to-book ratio is higher than its industry median ratio of 2.40. This could make AMN Healthcare Services, Inc. less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at AMN Healthcare Services, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. AMN Healthcare Services, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 23.07. This could make AMN Healthcare Services, Inc. more attractive because the lower P/FCF ratio indicates that AMN Healthcare Services, Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Flora Growth Corp’s Value Grade

Value Grade:

Flora Growth Corp. is a global cannabis company. The Company is a manufacturer, distributor and all-outdoor cultivator of global cannabis and pharmaceutical products and brands, building a connected, design-led collective of plant-based wellness and lifestyle brands. Its segments include Commercial & Wholesale, House of Brands and Pharmaceuticals. Its Commercial & Wholesale segment is engaged in the cultivation, transformation, and movement of cannabis and the distribution of pharmaceutical products to international markets. Its Pharmaceuticals segment is focused on developing pharmaceutical grade products and providing scientific-based research connected to molecules found in the cannabis plant. Its House of Brands include JustCBD, Vessel, Nocap, Mind Naturals, Stardog and Mambe. JustCBD is a consumer-packaged goods (CPG) brand consisting of over 350 products across 15 categories, including cannabidiol (CBD) gummies, topicals, tinctures, and vape products.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Flora Growth Corp has a Value Score of 71, which is considered to be undervalued.

Flora Growth Corp’s price-to-book ratio is higher than its peers. This could make Flora Growth Corp less attractive for value investors when compared to the industry median at 2.40.

You can read more about Flora Growth Corp’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Selectis Health Inc’s Value Grade

Value Grade:

Selectis Health, Inc. acquires, develops, leases, manages, and disposes of healthcare real estate, provides financing to healthcare providers, and provides healthcare operations through its wholly owned subsidiaries. Its portfolio is comprised of investments in three healthcare segments: senior housing, including independent and assisted living; post-acute/skilled nursing facilities; and bonds securing senior housing communities. The Company owns and operates, through wholly owned subsidiaries, Assisted Living Facilities, Independent Living Facilities, and Skilled Nursing Facilities across the South and Southeastern portions of the United States. Assisted Living Facilities are licensed care facilities that provide personal care services, support, and housing for those who need help with activities of daily living yet require limited medical care. Independent Living Facilities are designed to meet the needs of seniors who choose to live in an environment surrounded by their peers.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Selectis Health Inc has a Value Score of 94, which is considered to be undervalued.

You can read more about Selectis Health Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Healthcare Facilities & Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Healthcare Facilities & Services stocks as well as other industrys.

Choosing Which of the 3 Best Healthcare Facilities & Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• AMN Healthcare Services, Inc. stock has a Value Grade of B.
• Flora Growth Corp stock has a Value Grade of B.
• Selectis Health Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Healthcare Facilities & Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Healthcare Facilities & Services Stocks

Want to learn more about Healthcare Facilities & Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 3 Undervalued Healthcare Facilities & Services Stocks for Wednesday, February 07
• 3 Undervalued Healthcare Facilities & Services Stocks for Tuesday, February 06
• What You Need to Know About InnovAge Holding Corp's Q2 Earnings
• Why Accolade Inc’s (ACCD) Stock Is Up 9.44%

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