Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Pharmaceuticals 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.

Why Focus on Undervalued Pharmaceuticals 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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7 Undervalued Pharmaceuticals Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Pharmaceuticals industry for Wednesday, March 06, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Pharmaceuticals 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.

Akanda Corp’s Value Grade

Value Grade:

Akanda Corp. is an international medical cannabis and wellness platform company. The Company operates through three segments: Cultivation, Distribution and Corporate. The Cultivation segment is focused on the cultivation of medical cannabis and medical cannabis biomass. The Distribution segment undertakes the sale and distribution of medical cannabis products. Its portfolio includes Holigen, a Portugal-based cultivator, manufacturer, and distributor with an indoor growing facility, and CanMart, a United Kingdom-based fully licensed pharmaceutical importer and distributor which supplies pharmacies and clinics within the United Kingdom. Holigen consists of a 20,000 square foot indoor facility located near Lisbon dedicated to the cultivation of high-tetrahydrocannabinol (THC) cannabis. Its supply chain includes Cansativa Group, an importer and distributor of medical cannabis in Europe, and Cellen Life Sciences Leva Clinic, which is a fully digital pain clinic in the United Kingdom.

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.

Akanda Corp has a Value Score of 78, which is considered to be undervalued.

When you look at Akanda Corp’s price-to-sales ratio at 0.20 compared to the industry median at 2.63, this company has a lower price relative to revenue compared to its peers. This could make Akanda Corp’s stock more attractive for value investors.

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. Akanda Corp’s shareholder yield is lower than its industry median ratio of (3.63%). 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. Akanda Corp’s price-to-book ratio is lower than its industry median ratio of 2.01. This could make Akanda Corp more attractive to investors looking for a new addition to their portfolio.

Assertio Holdings Inc’s Value Grade

Value Grade:

Assertio Holdings, Inc. is a commercial pharmaceutical company offering differentiated products to patients utilizing a non-personal promotional model. Its commercial portfolio of branded products focuses on three areas: neurology, rheumatology, and pain and inflammation. Its primary marketed products include INDOCIN (indomethacin) Suppositories, INDOCIN (indomethacin) Oral Suspension, Otrexup (methotrexate) injection for subcutaneous use, Sympazan (clobazam) oral film, SPRIX (ketorolac tromethamine) Nasal Spray, CAMBIA (diclofenac potassium for oral solution) and Zipso (diclofenac potassium) Liquid filled capsules. It also offers OXAYDO (oxycodone HCI, USP) tablets. INDOCIN (indomethacin) Suppositories are nonsteroidal anti-inflammatory drug (NSAID), indicated for moderate to severe rheumatoid arthritis, including acute flares of chronic diseases, moderate to severe ankylosing spondylitis and others. Its portfolio also includes ROLVEDON (eflapegrastim-xnst) Injection asset.

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.

Assertio Holdings Inc has a Value Score of 91, which is considered to be undervalued.

Assertio Holdings Inc’s price-to-book ratio is higher than its peers. This could make Assertio Holdings Inc less attractive for value investors when compared to the industry median at 2.01.

You can read more about Assertio Holdings 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.

Cocrystal Pharma Inc’s Value Grade

Value Grade:

Cocrystal Pharma, Inc. is a biotechnology company. The Company is engaged in discovering and developing novel antiviral therapeutics that target the replication process of influenza viruses, coronaviruses (including SARS-CoV-2), hepatitis C viruses and noroviruses. It is developing antiviral therapeutics that inhibit the essential viral replication function of RNA viruses, causing acute and chronic viral diseases. It also uses advanced computational methods to screen and design product candidates using proprietary cocrystal structural information. The Company?s pipeline CC-42344 is an oral PB2 inhibitor discovered using Cocrystals proprietary structure-based drug discovery platform technology. It is specifically designed to be effective against all pandemic and seasonal influenza A strains and to have a high barrier to resistance due to the way the virus replication machinery is targeted.

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.

Cocrystal Pharma Inc has a Value Score of 77, which is considered to be undervalued.

Cocrystal Pharma Inc’s price-to-book ratio is higher than its peers. This could make Cocrystal Pharma Inc less attractive for value investors when compared to the industry median at 2.01.

You can read more about Cocrystal Pharma 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.

Fortress Biotech Inc’s Value Grade

Value Grade:

Fortress Biotech, Inc. is a biopharmaceutical company that acquires, develops and commercializes pharmaceutical and biotechnology products and product candidates. The Company markets its various branded dermatology products, Qbrexza, Accutane, Amzeeq, Zilxi, Ximino, Exelderm and Targadox. Qbrexza (glycopyrronium 2.4%) is a medicated cloth towelette for the treatment of primary axillary hyperhidrosis in adults and children nine years and older. Accutane (isotretinoin) is an oral capsule for the treatment of severe recalcitrant nodular acne. Amzeeq (minocycline 4%) topical foam is a topical minocycline treatment for the inflammatory lesions of non-nodular moderate to severe acne vulgaris in adults and children nine years and older. Zilxi (minocycline 1.5%) is a topical foam and a topical minocycline treatment for inflammatory lesions of rosacea in adults. Ximino (minocycline hydrochloride) is an oral minocycline drug for the treatment of moderate to severe acne.

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.

Fortress Biotech Inc has a Value Score of 61, which is considered to be undervalued.

Fortress Biotech Inc’s price-to-book ratio is higher than its peers. This could make Fortress Biotech Inc less attractive for value investors when compared to the industry median at 2.01.

You can read more about Fortress Biotech 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.

RedHill Biopharma Ltd (ADR)’s Value Grade

Value Grade:

RedHill Biopharma Ltd is an Israel-based specialty biopharmaceutical company primarily focused on gastrointestinal and infectious diseases. RedHill promotes the gastrointestinal drugs such as, Talicia for the treatment of Helicobacter pylori (H. pylori) infection, and Aemcolo, for the treatment of travelers? diarrhea. RedHill?s clinical late-stage development programs include: :info: RHB-204, for pulmonary nontuberculous mycobacteria (NTM) disease; opaganib (ABC294640), host-directed, SPHK2 inhibitor targeting multiple indications, RHB-107 (upamostat), an oral, host-directed serine protease inhibitor with potential for pandemic preparedness, is in late-stage development for treatment of non-hospitalized symptomatic COVID-19, and is targeting multiple other cancer and inflammatory gastrointestinal diseases; RHB-104 for Crohn's disease; and RHB-102 for chemotherapy and radiotherapy induced nausea and vomiting.

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.

RedHill Biopharma Ltd (ADR) has a Value Score of 69, which is considered to be undervalued.

RedHill Biopharma Ltd (ADR)’s price-to-book ratio is higher than its peers. This could make RedHill Biopharma Ltd (ADR) less attractive for value investors when compared to the industry median at 2.01.

You can read more about RedHill Biopharma Ltd (ADR)’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.

Rapid Micro Biosystems Inc’s Value Grade

Value Grade:

Rapid Micro Biosystems, Inc. is a life sciences technology company. The Company provides automation solutions to facilitate the manufacturing and release of healthcare products, such as biologics, vaccines, cell and gene therapies, and sterile injectables. Its flagship Growth Direct platform automates and modernizes the manual microbial quality control (MQC), testing workflows used in pharmaceutical manufacturing operations across the globe. The Growth Direct platform helps on the manufacturing floor, unlocking the power of in-line/at-the-line MQC automation to deliver results with data regulations, and decision-making that its customers rely on to ensure the supply of healthcare products. The Company?s Growth Direct platform is the automated MQC solution. The Company offers two consumables? plates to capture test samples for analysis on the Growth Direct, which includes an Environmental Monitoring (EM) consumable, and a Water/Bioburden (W/BB) consumable.

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.

Rapid Micro Biosystems Inc has a Value Score of 62, which is considered to be undervalued.

Rapid Micro Biosystems Inc’s price-to-book ratio is higher than its peers. This could make Rapid Micro Biosystems Inc less attractive for value investors when compared to the industry median at 2.01.

You can read more about Rapid Micro Biosystems 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.

Medicine Man Technologies Inc’s Value Grade

Value Grade:

Medicine Man Technologies, Inc., operating as Schwazze, is a vertically integrated multi-state cannabis operator. The Company?s business involves the cultivation, manufacturing, distribution and retail sale of cannabis and cannabis-related products. The Company sells products it manufactures and cultivates and a variety of other cannabis goods through wholly owned retail stores, licensing arrangements, and/or third-party operators and retailers. The Company has three segments: Retail, Wholesale and Other. Retail segment consists of retail locations for the sale of cannabis products. The segment includes its Retail dispensaries located in Colorado and New Mexico. Wholesale segment consists of manufacturing, cultivation and sale of both wholesale cannabis and non-cannabis products. Other segment includes general corporate and other. It has operations in Colorado and New Mexico. It owns and operates 42 retail dispensaries, five cultivation facilities, and two manufacturing facilities.

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.

Medicine Man Technologies Inc has a Value Score of 78, which is considered to be undervalued.

Medicine Man Technologies Inc’s price-to-book ratio is higher than its peers. This could make Medicine Man Technologies Inc less attractive for value investors when compared to the industry median at 2.01.

You can read more about Medicine Man Technologies 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 Pharmaceuticals 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 Pharmaceuticals stocks as well as other industrys.

Choosing Which of the 7 Best Pharmaceuticals 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.

• Akanda Corp stock has a Value Grade of B.
• Assertio Holdings Inc stock has a Value Grade of A.
• Cocrystal Pharma Inc stock has a Value Grade of B.
• Fortress Biotech Inc stock has a Value Grade of B.
• RedHill Biopharma Ltd (ADR) stock has a Value Grade of B.
• Rapid Micro Biosystems Inc stock has a Value Grade of B.
• Medicine Man Technologies Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 undervalued stocks in the Pharmaceuticals 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 Pharmaceuticals Stocks

Want to learn more about Pharmaceuticals 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.

• 7 Undervalued Pharmaceuticals Stocks for Wednesday, March 06
• 3 Undervalued Pharmaceuticals Stocks for Tuesday, March 05
• Which Is a Better Investment, Apellis Pharmaceuticals Inc or Catalyst Pharmaceuticals Inc Stock?
• Which Is a Better Investment, Axsome Therapeutics Inc or Catalyst Pharmaceuticals Inc Stock?

AAII Disclaimer

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