Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 stocks made the list for top value stocks in the Medical Equipment, Supplies & Distribution 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 Medical Equipment, Supplies & Distribution 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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5 Undervalued Medical Equipment, Supplies & Distribution Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 5 undervalued stocks in the Medical Equipment, Supplies & Distribution industry for Wednesday, April 24, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Medical Equipment, Supplies & Distribution 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.

Agiliti Inc’s Value Grade

Value Grade:

Agiliti, Inc. is an essential service provider to the United States healthcare industry. The Company offers healthcare providers a comprehensive suite of medical equipment management and service solutions. The Company’s gateway solutions offer an entry point to the economic buyer and include peak needs equipment, surgical lasers and equipment, specialty beds and surfaces and supplemental clinical engineering services. Its vertical solutions include clinical offerings tailored to specific patient needs and clinical engineering programs for equipment categories. The Company provides comprehensive, connected solutions through onsite managed services and outsourced clinical engineering services. The Company also provides comprehensive logistics, management and clinical engineering solutions that allow IDNs to manage equipment inventories across multiple locations, and supports city, state and federal government agencies in managing and maintaining equipment stockpiles.

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.

Agiliti Inc has a Value Score of 62, which is considered to be undervalued.

When you look at Agiliti Inc’s price-to-sales ratio at 1.15 compared to the industry median at 2.80, this company has a lower price relative to revenue compared to its peers. This could make Agiliti Inc’s stock more attractive for value investors.

Now, let’s assess Agiliti Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 8.5, when compared to the industry median of 17.5, 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. Agiliti Inc’s shareholder yield is higher than its industry median ratio of (2.19%). 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. Agiliti Inc’s price-to-book ratio is lower than its industry median ratio of 2.43. This could make Agiliti Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Agiliti Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Agiliti Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 37.22. This could make Agiliti Inc more attractive because the lower P/FCF ratio indicates that Agiliti 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.

AngioDynamics, Inc.’s Value Grade

Value Grade:

AngioDynamics, Inc. is a transformative medical technology company. The Company is focused on restoring healthy blood flow in the body's vascular system, expanding cancer treatment options and improving quality of life for patients. It designs, manufactures, and sells a range of medical, surgical and diagnostic devices used by professional healthcare providers for vascular access, for the treatment of peripheral vascular disease and for use in oncology and surgical settings. Its devices are generally used in minimally invasive, image-guided procedures. Its segments include Med Tech and Med Device. Its product categories include oncology, venous therapies, vascular interventions, and ports. Its oncology products include Model 1500X RF Generator, IsoLoc Endorectal Balloon, Habib 4X Laparoscopic Bipolar Resection Device, Habib 4X Bipolar Resection Device, and Alatus. Its venous therapies include VenaCure EVLT 1470 Pro Laser, VenaCure EVLT System, VenaCure EVLT Procedure Packs, and others.

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.

AngioDynamics, Inc. has a Value Score of 62, which is considered to be undervalued.

AngioDynamics, Inc.’s price-to-book ratio is higher than its peers. This could make AngioDynamics, Inc. less attractive for value investors when compared to the industry median at 2.43.

You can read more about AngioDynamics, 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.

Applied DNA Sciences Inc’s Value Grade

Value Grade:

Applied DNA Sciences, Inc. is a biotechnology company that develops, and markets deoxyribonucleic acid (DNA) based technology solutions. The Company is utilizing its LinearDNA large-scale polymerase chain reaction (PCR) based manufacturing platform. The Company’s proprietary platform produces large quantities of DNA for use in the nucleic acid-based in vitro diagnostics and preclinical nucleic-acid based drug development and manufacturing markets and for supply chain security, anti-counterfeiting and anti-theft technology purposes. It also develops PCR-based molecular in vitro diagnostics for covid-19. In addition, under its wholly owned subsidiary, Applied DNA Clinical Labs, LLC, the Company is offering a high-throughput turnkey solution for population-scale Covid-19 testing marketed as safeCircle. safeCircle utilizes the Company’s Covid-19 Diagnostic Tests and is designed to look for infection within defined populations or communities utilizing high throughput testing methodologies.

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.

Applied DNA Sciences Inc has a Value Score of 65, which is considered to be undervalued.

Applied DNA Sciences Inc’s price-to-book ratio is higher than its peers. This could make Applied DNA Sciences Inc less attractive for value investors when compared to the industry median at 2.43.

You can read more about Applied DNA Sciences 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.

Rewalk Robotics Ltd’s Value Grade

Value Grade:

ReWalk Robotics Ltd. doing business as Lifeward is a medical device company. The Company is engaged in designing, developing, and commercializing exoskeletons that allow individuals with mobility impairments or other medical conditions the ability to stand and walk again. The Company offers an exoskeleton that uses its tilt-sensor technology and an onboard computer and motion sensors to drive motorized legs that power movement. Lifeward designs are intended for people with paraplegia, a spinal cord injury resulting in complete or incomplete paralysis of the legs, having the use of their upper bodies and arms. The Company offers multiple products: ReWalk Personal, ReStore Exo-Suit, MYOLYN FES Cycling, and AlterG Anti-Gravity Systems. ReWalk Personal is designed for everyday use by paraplegic individuals at home and in their communities and is custom-fitted for each user. Lifeward Rehabilitation products are for use by paraplegia patients in the clinical rehabilitation environment.

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.

Rewalk Robotics Ltd has a Value Score of 61, which is considered to be undervalued.

Rewalk Robotics Ltd’s price-to-book ratio is higher than its peers. This could make Rewalk Robotics Ltd less attractive for value investors when compared to the industry median at 2.43.

You can read more about Rewalk Robotics Ltd’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.

Sonendo Inc’s Value Grade

Value Grade:

Sonendo, Inc. is a commercial-stage medical technology company focused on saving teeth from tooth decay. The Company develops and manufactures the GentleWave System, a technology platform designed to treat tooth decay by cleaning and disinfecting the microscopic spaces within teeth without the need to remove tooth structure. The system utilizes a mechanism of action, which combines procedure fluid optimization, broad-spectrum acoustic energy, and advanced fluid dynamics, to debride and disinfect deep regions of the complex root canal system in a less invasive procedure that preserves tooth structure. Its Product segment includes the sales of the GentleWave System console and related accessories and instruments. The Company also offers ancillary products, such as SoundSeal and its Sonendo-branded liquid solution of ethylenediaminetetraacetic acid (EDTA). SoundSeal is a material used during the GentleWave Procedure to build and create a sealing platform on the top of the crown.

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.

Sonendo Inc has a Value Score of 72, which is considered to be undervalued.

Sonendo Inc’s price-to-book ratio is higher than its peers. This could make Sonendo Inc less attractive for value investors when compared to the industry median at 2.43.

You can read more about Sonendo 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 Medical Equipment, Supplies & Distribution 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 Medical Equipment, Supplies & Distribution stocks as well as other industrys.

Choosing Which of the 5 Best Medical Equipment, Supplies & Distribution 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.

• Agiliti Inc stock has a Value Grade of B.
• AngioDynamics, Inc. stock has a Value Grade of B.
• Applied DNA Sciences Inc stock has a Value Grade of B.
• Rewalk Robotics Ltd stock has a Value Grade of B.
• Sonendo Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 5 undervalued stocks in the Medical Equipment, Supplies & Distribution 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 Medical Equipment, Supplies & Distribution Stocks

Want to learn more about Medical Equipment, Supplies & Distribution 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.

• 5 Undervalued Medical Equipment, Supplies & Distribution Stocks for Wednesday, April 24
• Why Avantor Inc’s (AVTR) Stock Is Up 5.08%
• Why Mesa Laboratories Inc’s (MLAB) Stock Is Up 4.26%
• Why Neogen Corp’s (NEOG) Stock Is Up 4.50%

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