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 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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5 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 5 undervalued stocks in the Healthcare Facilities & Services industry for Wednesday, June 12, 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 total talent solutions for healthcare organizations across the United States. The Company provides access to a comprehensive network of quality healthcare professionals through its recruitment strategies and breadth of career opportunities. The Company’s nurse and allied solutions segment include the Company’s travel nurse staffing (including international nurse staffing and rapid response nurse staffing), labor disruption staffing, local staffing, international nurse and allied permanent placement, and allied staffing (including revenue cycle solutions) businesses. The physician and leadership solutions segment includes the Company’s locum tenens staffing, healthcare interim leadership staffing, executive search, and physician permanent placement businesses. The technology and workforce solutions segment includes the Company’s language services, vendor management systems (VMS), workforce optimization, and outsourced solutions businesses.

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 0.59 compared to the industry median at 1.21, 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 14.45 compared to the industry median at 21.31. 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 8.6, 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. AMN Healthcare Services, Inc.’s shareholder yield is higher than its industry median ratio of (1.68%). 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 2.38. 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 25.59. 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.

American Well Corp’s Value Grade

Value Grade:

American Well Corporation is an enterprise platform and software company digitally enabling hybrid care. The Company offers a single, comprehensive platform to support all digital health needs from urgent to acute and post-acute care, as well as chronic care management and healthy living. It provides its clients with the core technology and services necessary to develop and distribute digital care programs. Its enterprise platform and software as a service solution enable hybrid care delivery by offering its clients products to help weave digital care across all care settings. For health systems, its enterprise platform enables provider-to-provider virtual care for use cases ranging from stroke and acute psychiatry evaluations to virtual nursing and e-sitting. Its suite of Carepoint devices can enhance in-person care, whether the clients want to turn existing equipment such as televisions or iPads into digital access points or use Amwell Carepoint carts and peripherals.

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.

American Well Corp has a Value Score of 91, which is considered to be undervalued.

American Well Corp’s price-to-book ratio is higher than its peers. This could make American Well Corp less attractive for value investors when compared to the industry median at 2.38.

You can read more about American Well 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.

Community Health Systems Inc’s Value Grade

Value Grade:

Community Health Systems, Inc. is a healthcare company. The Company, through its subsidiaries, owns or leases over 71 affiliated hospitals, with approximately 12,000 beds, and operate more than 1,000 sites of care, including physician practices, urgent care centers, freestanding emergency departments, occupational medicine clinics, imaging centers, cancer centers and ambulatory surgery centers. The Company, through its affiliates, providers of healthcare services, develops and operating healthcare delivery systems in over 40 distinct markets across 15 states. Its hospitals are general care hospitals offering a range of inpatient and outpatient medical services. These services generally include general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric and rehabilitation services. In addition, some of its hospitals provide skilled nursing and home care services based on individual community needs.

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.

Community Health Systems Inc has a Value Score of 79, which is considered to be undervalued.

You can read more about Community Health Systems 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.

Pacific Health Care Organization Inc’s Value Grade

Value Grade:

Pacific Health Care Organization, Inc. is engaged in managing and administering health care organizations (HCOs) and managed provider networks (MPNs) in the state of California. The Company offers an integrated and layered array of complementary business solutions that enable its customers to manage their employee worker compensation-related healthcare administration costs. Its services include providing customers access to its HCOs and MPNs. The Company also provides medical case management, medical bill review, employee advocate services, utilization review, workers' compensation carve-outs and Medicare set-aside services. In addition, it also provides expert witness testimony. It offers its services as a bundled solution, as standalone services, or as add-on services. Its customers include self-administered employers, insurers, third party administrators, municipalities and others. The Company's subsidiaries include Medex Healthcare, Inc., Medex Medical Management, Inc., 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.

Pacific Health Care Organization Inc has a Value Score of 73, which is considered to be undervalued.

Pacific Health Care Organization Inc’s price-earnings ratio is 12.3 compared to the industry median at 21.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Pacific Health Care Organization Inc more attractive for value investors.

Pacific Health Care Organization Inc’s price-to-book ratio is higher than its peers. This could make Pacific Health Care Organization Inc less attractive for value investors when compared to the industry median at 2.38.

You can read more about Pacific Health Care Organization 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.

Quipt Home Medical Corp’s Value Grade

Value Grade:

Quipt Home Medical Corp. is a home medical equipment provider. The Company specializes in improving the home management of chronic illness through the application of telehealth systems and automated distribution. It provides in-home monitoring and disease management services, including end-to-end respiratory solutions for patients in the United States. It offers nebulizers, oxygen concentrators, continuous positive airway pressure (CPAP) and Bilevel Positive Airway Pressure (BiPAP) units; traditional and non-traditional medical respiratory equipment and services, and non-invasive ventilation equipment, supplies, and services. The Company's product offerings include the management of several chronic disease states focusing on patients with heart or pulmonary disease, sleep disorders, reduced mobility, and other chronic health conditions. Its products and services consist of sleep apnea and pap treatment, home ventilation, daily and ambulatory aides, and respiratory equipment rental.

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.

Quipt Home Medical Corp has a Value Score of 86, which is considered to be undervalued.

Quipt Home Medical Corp’s price-to-book ratio is higher than its peers. This could make Quipt Home Medical Corp less attractive for value investors when compared to the industry median at 2.38.

You can read more about Quipt Home Medical 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.

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 5 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.
• American Well Corp stock has a Value Grade of A.
• Community Health Systems Inc stock has a Value Grade of B.
• Pacific Health Care Organization Inc stock has a Value Grade of B.
• Quipt Home Medical Corp stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 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.

• 5 Undervalued Healthcare Facilities & Services Stocks for Wednesday, June 12
• 4 Undervalued Healthcare Facilities & Services Stocks for Tuesday, June 11
• Why Accolade Inc’s (ACCD) Stock Is Down 4.60%
• 4 Undervalued Healthcare Facilities & Services Stocks for Monday, June 10

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