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 Friday, March 22, 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.

Aurora Cannabis Inc’s Value Grade

Value Grade:

Aurora Cannabis Inc. is a Canada-based medical cannabis company. The Company's principal business lines are focused on the production, distribution, and sale of cannabis related products in Canada and internationally. The Company’s segments include Canadian Cannabis, European Cannabis and Plant Propagation. The Company's adult-use brand portfolio includes Aurora Drift, San Rafael '71, Daily Special, Whistler, Being and Greybeard, as well as CBD brands, Reliva and KG7. Its medical cannabis brands include MedReleaf, CanniMed, Aurora and Whistler Medical Marijuana Co, as well as international brands, Pedanios, Bidiol and CraftPlant. Its cannabis products are primarily cultivated and manufactured in the facilities in Bradford Ontario, Pemberton, British Columbia, and Odense, Denmark. The Company is focused on offering its cannabis products to global medical cannabis market, recreational cannabis market and global hemp-derived cannabidiol (CBD) markets.

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.

Aurora Cannabis Inc has a Value Score of 63, which is considered to be undervalued.

When you look at Aurora Cannabis Inc’s price-to-sales ratio at 0.68 compared to the industry median at 2.69, this company has a lower price relative to revenue compared to its peers. This could make Aurora Cannabis Inc’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. Aurora Cannabis Inc’s shareholder yield is lower than its industry median ratio of (3.44%). 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. Aurora Cannabis Inc’s price-to-book ratio is lower than its industry median ratio of 1.92. This could make Aurora Cannabis Inc more attractive to investors looking for a new addition to their portfolio.

Amylyx Pharmaceuticals Inc’s Value Grade

Value Grade:

Amylyx Pharmaceuticals, Inc. is a commercial-stage biopharmaceutical company. The Company is engaged in the discovery and development of treatments for neurodegenerative diseases. The Company is focused on the development and commercialization of its product candidate, AMX0035 (sodium phenylbutyrate and taurursodiol, also known as ursodoxicoltaurine) for the treatment of amyotrophic lateral sclerosis (ALS). RELYVRIO (also known as AMX0035), an oral, fixed-dose combination of sodium phenylbutyrate and taurursodiol is approved to treat ALS in adults in the United States. AMX0035 is a dual unfolded protein response (UPR)-Bax apoptosis inhibitor composed of PB and TURSO (also known as TUDCA). Its development of antisense oligonucleotides (ASOs), including lead ASO AMX0114, which targets calpain-2 (CAPN2), a gene encoding calcium-dependent proteolytic enzyme which has been implicated in the pathogenesis of ALS and other neurodegenerative diseases.

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.

Amylyx Pharmaceuticals Inc has a Value Score of 67, which is considered to be undervalued.

Amylyx Pharmaceuticals Inc’s price-earnings ratio is 4.1 compared to the industry median at 24.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Amylyx Pharmaceuticals Inc more attractive for value investors.

Amylyx Pharmaceuticals Inc’s price-to-book ratio is higher than its peers. This could make Amylyx Pharmaceuticals Inc less attractive for value investors when compared to the industry median at 1.92.

You can read more about Amylyx Pharmaceuticals 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.

Bristol-Myers Squibb Co’s Value Grade

Value Grade:

Bristol-Myers Squibb Company is a biopharmaceutical company engaged in the discovery, development and delivering advanced medicines that help patients prevail over serious diseases. It offers products for various therapeutic classes, which includes oncology, hematology, immunology, cardiovascular and neuroscience. Its pharmaceutical products include chemically synthesized or small molecule drugs, products produced from biological processes, called biologics and chimeric antigen receptor (CAR-T) cell therapies. Small molecule drugs are typically administered orally in the form of a tablet or capsule, although other drug delivery mechanisms are used as well. Biologics are administered to patients through injections or by intravenous infusion. Its in-line products include Eliquis, Opdivo, Orencia, Pomalyst/Imnovid, Yervoy, Sprycel, Reblozyl, Opdualag, Abecma, Zeposia, and others. The Company's product pipeline includes Krazati, MRTX1719, RYZ101, KarXT, ORM-6151, and Repotrectinib.

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.

Bristol-Myers Squibb Co has a Value Score of 63, which is considered to be undervalued.

Bristol-Myers Squibb Co’s price-earnings ratio is 13.4 compared to the industry median at 24.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Bristol-Myers Squibb Co more attractive for value investors.

Bristol-Myers Squibb Co’s price-to-book ratio is lower than its peers. This could make Bristol-Myers Squibb Co more attractive for value investors when compared to the industry median at 1.92.

You can read more about Bristol-Myers Squibb Co’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.

Hoth Therapeutics Inc’s Value Grade

Value Grade:

Hoth Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing therapies for unmet medical needs. The Company is also focused on developing a topical formulation for treating side effects from drugs used for the treatment of cancer; a treatment for mast-cell derived cancers and anaphylaxis; a treatment for traumatic brain injury and ischemic stroke, and a treatment and/or prevention for Alzheimer?s or other neuroinflammatory diseases. It also has assets being developed for atopic dermatitis; a treatment for asthma and allergies using inhalational administration, and a treatment for acne as well as inflammatory bowel diseases. It is also developing a diagnostic device via a mobile device. Its development products include HT-001, HT-KIT, HT-TBI and HT-ALZ. Its preclinical development products include HT-003, HT-004, and HT-002. It also has interests in certain other assets being developed by third parties, including a treatment for patients with lupus.

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.

Hoth Therapeutics Inc has a Value Score of 70, which is considered to be undervalued.

Hoth Therapeutics Inc’s price-to-book ratio is higher than its peers. This could make Hoth Therapeutics Inc less attractive for value investors when compared to the industry median at 1.92.

You can read more about Hoth Therapeutics 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.

Natural Alternatives International, Inc.’s Value Grade

Value Grade:

Natural Alternatives International, Inc. is a formulator, manufacturer and marketer of nutritional supplements. The Company operates through two segments: Private-label contract manufacturing, and Royalty, licensing, and raw material. The Private-label contract manufacturing segment primarily provides manufacturing services to companies that market and distribute nutritional supplements and other health care products. Royalty, licensing, and raw material segment associated with the sale and license of beta-alanine under the Company’s CarnoSyn and SR CarnoSyn trademarks. The Company provides private-label contract manufacturing services to companies that market and distribute vitamins, minerals, herbal and other nutritional supplements as well as other health care products. It private-label contract manufacturing customers include companies that market nutritional supplements through direct sales marketing channels, direct to consumer e-commerce channels, and retail stores.

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.

Natural Alternatives International, Inc. has a Value Score of 77, which is considered to be undervalued.

Natural Alternatives International, Inc.’s price-to-book ratio is higher than its peers. This could make Natural Alternatives International, Inc. less attractive for value investors when compared to the industry median at 1.92.

You can read more about Natural Alternatives International, 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.

SCYNEXIS Inc’s Value Grade

Value Grade:

SCYNEXIS, Inc. is a biotechnology company. The Company is developing its lead product candidate, ibrexafungerp, as a broad-spectrum, intravenous (IV)/oral agent for multiple fungal indications in both the community and hospital settings. Its Ibrexafungerp has demonstrated activity against a large collection of medically relevant strains of Candida and Aspergillus genera, including multidrug-resistant strains, as well as Pneumocystis, Coccidioides, Histoplasma and Blastomyces genera. The Company has received approval from the United States Food and Drug Administration (FDA) for the New Drug Application (NDA) for BREXAFEMME (ibrexafungerp tablets) for the treatment of vulvovaginal candidiasis (VVC, also known as vaginal yeast infection), and for the reduction in the incidence of recurrent vulvovaginal candidiasis (RVVC), respectively.

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.

SCYNEXIS Inc has a Value Score of 97, which is considered to be undervalued.

SCYNEXIS Inc’s price-earnings ratio is 1.0 compared to the industry median at 24.2. This means that it has a lower price relative to its earnings compared to its peers. This makes SCYNEXIS Inc more attractive for value investors.

SCYNEXIS Inc’s price-to-book ratio is higher than its peers. This could make SCYNEXIS Inc less attractive for value investors when compared to the industry median at 1.92.

You can read more about SCYNEXIS 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.

SIGA Technologies Inc’s Value Grade

Value Grade:

SIGA Technologies, Inc. is a commercial-stage pharmaceutical company focused on the health security market. Health security comprises countermeasures for biological, chemical, radiological and nuclear attacks, vaccines and therapies for emerging infectious diseases, and health preparedness. The Company's lead product is TPOXX, also known as tecovirimat and ST-246, an orally administered and intravenous (IV) formulation antiviral drug for the treatment of human smallpox disease caused by variola virus. TPOXX is a novel small-molecule drug and the United States maintains a supply of TPOXX under Project BioShield. The European Medicines Agency and United Kingdom approvals include labeling for oral tecovirimat indicating its use for the treatment of smallpox, monkeypox, cowpox, and vaccinia complications following vaccination against smallpox. It uses third parties known as contract manufacturing organizations to procure commercial raw materials and supplies, and to manufacture TPOXX.

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.

SIGA Technologies Inc has a Value Score of 69, which is considered to be undervalued.

SIGA Technologies Inc’s price-earnings ratio is 9.5 compared to the industry median at 24.2. This means that it has a lower price relative to its earnings compared to its peers. This makes SIGA Technologies Inc more attractive for value investors.

SIGA Technologies Inc’s price-to-book ratio is lower than its peers. This could make SIGA Technologies Inc more attractive for value investors when compared to the industry median at 1.92.

You can read more about SIGA 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.

• Aurora Cannabis Inc stock has a Value Grade of B.
• Amylyx Pharmaceuticals Inc stock has a Value Grade of B.
• Bristol-Myers Squibb Co stock has a Value Grade of B.
• Hoth Therapeutics Inc stock has a Value Grade of B.
• Natural Alternatives International, Inc. stock has a Value Grade of B.
• SCYNEXIS Inc stock has a Value Grade of A.
• SIGA 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 Friday, March 22
• 6 Undervalued Pharmaceuticals Stocks for Thursday, March 21
• Which Is a Better Investment, Apellis Pharmaceuticals Inc or Grifols SA - ADR Stock?
• Which Is a Better Investment, Axsome Therapeutics Inc or Grifols SA - ADR Stock?

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