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 Friday, June 21, 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.

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.

When you look at Community Health Systems Inc’s price-to-sales ratio at 0.03 compared to the industry median at 1.13, this company has a lower price relative to revenue compared to its peers. This could make Community Health Systems Inc’s stock more attractive for value investors.

Now, let’s assess Community Health Systems Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 8.4, 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. Community Health Systems 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.

Selectis Health Inc’s Value Grade

Value Grade:

Selectis Health, Inc. acquires, develops, leases, manages, and disposes of healthcare real estate, provides financing to healthcare providers, and provides healthcare operations through its wholly owned subsidiaries. Its portfolio is comprised of investments in three healthcare segments: senior housing, including independent and assisted living, and post-acute/skilled nursing facilities. The Company owns and operates, through wholly owned subsidiaries, Assisted Living Facilities, Independent Living Facilities, and Skilled Nursing Facilities across the South and Southeastern portions of the United States. Assisted Living Facilities are licensed care facilities that provide personal care services, support, and housing for those who need help with activities of daily living yet require limited medical care. Independent Living Facilities are designed to meet the needs of seniors who choose to live in an environment surrounded by their peers.

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.

Selectis Health Inc has a Value Score of 92, which is considered to be undervalued.

You can read more about Selectis Health 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.

Genetic Technologies Limited (ADR)’s Value Grade

Value Grade:

Genetic Technologies Limited is an Australia-based diversified molecular diagnostics company. The Company is engaged in providing genomics-based tests on health, wellness and serious disease through its geneType and EasyDNA brands. The Company offers cancer predictive testing and assessment tools to help physicians to improve health outcomes for people around the world. The Company has a proprietary risk stratification platform that integrates clinical and genetic risk to deliver outcomes to physicians and individuals. The Company operates through three segments: EasyDNA, AffinityDNA, and GeneType / Corporate. EasyDNA segment relates to EasyDNA branded test sales and expenses. AffinityDNA segment relates to AffinityDNA branded test sales and expenses. GeneType / Corporate segment relates to geneType branded test sales and expenses, including corporate charges. The GeneType test is for breast cancer, colorectal cancer, ovarian cancer, prostate cancer, coronary artery disease and mor

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.

Genetic Technologies Limited (ADR) has a Value Score of 80, which is considered to be undervalued.

Genetic Technologies Limited (ADR)’s price-to-book ratio is higher than its peers. This could make Genetic Technologies Limited (ADR) less attractive for value investors when compared to the industry median at 2.18.

You can read more about Genetic Technologies Limited (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.

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.

• Community Health Systems Inc stock has a Value Grade of B.
• Selectis Health Inc stock has a Value Grade of A.
• Genetic Technologies Limited (ADR) 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 Friday, June 21
• 4 Undervalued Healthcare Facilities & Services Stocks for Thursday, June 20
• Why Agilon Health Inc’s (AGL) Stock Is Down 5.79%
• Why Surgery Partners Inc’s (SGRY) Stock Is Down 5.43%

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.