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.

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 Thursday, May 09, 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.

Target Group Inc’s Value Grade

Value Grade:

Target Group Inc. is a cannabis and hemp consumer packaged goods (CPG) company. The Company is engaged in the cultivation, processing, and distribution of curated cannabis products for the adult-use medical and recreational cannabis market in Canada and in the United States. Its products include Cannabis flower pods for vaporizer use, Cannabis extract pods for vaporizer use, Cannabis pre-rolls, K-Cup infused coffee and tea pots, Infused cannabis beverages, Infused cannabis edibles and infused topical products and CBD wellness products. The Company's subsidiary, Canary Rx Inc, is a Canadian licensed producer, which operates an approximately 44,000 square foot facility located in Norfolk County, Ontario. The Company's subsidiary, CannaKorp Inc., has developed a single-use pre-measured pod and vaporizer system, such as The Wisp and Wisp Pods for consumers interested in vaporizing natural herbs, including cannabis.

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.

Target Group Inc has a Value Score of 90, which is considered to be undervalued.

When you look at Target Group Inc’s price-to-sales ratio at 0.50 compared to the industry median at 1.24, this company has a lower price relative to revenue compared to its peers. This could make Target Group Inc’s stock more attractive for value investors.

Now, let’s assess Target Group Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 3.3, when compared to the industry median of 13.1, 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. Target Group Inc’s shareholder yield is higher than its industry median ratio of (2.27%). 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.

Tenet Healthcare Corp’s Value Grade

Value Grade:

Tenet Healthcare Corporation is a diversified healthcare services company. The Company’s care delivery network includes USPI Holding Company, Inc. (USPI), which operates or has ownership interests in ambulatory surgery centers and surgical hospitals. The Company also operates acute care and specialty hospitals, as well as other outpatient facilities, including surgical hospitals, and ambulatory surgery centers (ASC), among others. The Company operates through two segments: Hospital Operations and Services, and Ambulatory Care. The Hospital Operations and Services segment, which is comprised of acute care and specialty hospitals, a network of employed physicians and ancillary outpatient facilities, as well as the revenue cycle management and value-based care services that the Company provide to hospitals, health systems, physician practices, employers, and other clients. The Ambulatory Care segment, which is comprised of USPI’s ASCs and surgical hospitals.

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.

Tenet Healthcare Corp has a Value Score of 84, which is considered to be undervalued.

Tenet Healthcare Corp’s price-earnings ratio is 4.7 compared to the industry median at 22.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Tenet Healthcare Corp more attractive for value investors.

Tenet Healthcare Corp’s price-to-book ratio is lower than its peers. This could make Tenet Healthcare Corp more attractive for value investors when compared to the industry median at 2.21.

You can read more about Tenet Healthcare 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.

Exagen Inc’s Value Grade

Value Grade:

Exagen Inc. is a provider of autoimmune testing and its purpose as an organization is to provide clarity in autoimmune disease decision-making. The Company has developed and is commercializing a portfolio of testing products, under its AVISE brand. It commercially launched its testing product, AVISE CTD, which enables differential diagnosis for patients presenting with symptoms indicative of a variety of connective tissue diseases (CTDs) and other related diseases with overlapping symptoms. The comprehensive nature of AVISE CTD allows for the testing of various relevant biomarkers in one convenient blood draw. Included in AVISE CTD is its proprietary AVISE Lupus test, which enables the diagnosis of systemic lupus erythematosus (SLE) based on levels of erythrocyte bound C4d (EC4d) and B cell C4d (BC4d); along with anti-nuclear antibodies (ANA) and double-stranded DNA antibodies (ds-DNA). AVISE Lupus provides rheumatologists and their patients with sensitive and specific results.

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.

Exagen Inc has a Value Score of 64, which is considered to be undervalued.

Exagen Inc’s price-to-book ratio is higher than its peers. This could make Exagen Inc less attractive for value investors when compared to the industry median at 2.21.

You can read more about Exagen 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.

• Target Group Inc stock has a Value Grade of A.
• Tenet Healthcare Corp stock has a Value Grade of A.
• Exagen Inc stock has a Value Grade of B.

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 Thursday, May 09
• 3 Undervalued Healthcare Facilities & Services Stocks for Wednesday, May 08
• What You Need to Know About R1 Rcm Inc's Q1 Earnings
• Why Accolade Inc’s (ACCD) Stock Is Down 4.30%

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.