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 Biotechnology & Medical Research 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 Biotechnology & Medical Research 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 Biotechnology & Medical Research 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 Biotechnology & Medical Research industry for Tuesday, October 01, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Biotechnology & Medical Research 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.

Connect Biopharma Holdings Ltd (ADR)’s Value Grade

Value Grade:

Connect Biopharma Holdings Limited is a global clinical-stage biopharmaceutical company focused on improving the lives of patients with chronic inflammatory diseases through the development of therapies derived from T cell-driven research. It is building a pipeline of proprietary small molecules and antibodies, using functional T cell assays, to screen and discover potent product candidates against validated immune targets. Its lead product candidate, rademikibart, is an antibody designed to target interleukin-4 receptor alpha (IL-4Ra) in development for the treatment of atopic dermatitis (AD) and asthma. As an inhibitor of IL-4Ra, rademikibart blocks inflammatory signaling by both IL-4 and IL-13. Its second product candidate, icanbelimod, is a modulator of S1P1 T cell receptors and is in development for the treatment of ulcerative colitis (UC). Icanbelimod is an orally available, small molecule modulator of S1P1 that is designed to reduce inflammation without killing T cells.

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.

Connect Biopharma Holdings Ltd (ADR) has a Value Score of 82, which is considered to be undervalued.

When you look at Connect Biopharma Holdings Ltd (ADR)’s price-to-sales ratio at 3.29 compared to the industry median at 7.70, this company has a lower price relative to revenue compared to its peers. This could make Connect Biopharma Holdings Ltd (ADR)’s stock more attractive for value investors.

Now, let’s assess Connect Biopharma Holdings Ltd (ADR)’s EV/EBITDA ratio, also known as enterprise multiple. At 1.2, when compared to the industry median of 1.0, the company may be considered overvalued 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.

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. Connect Biopharma Holdings Ltd (ADR)’s price-to-book ratio is lower than its industry median ratio of 1.87. This could make Connect Biopharma Holdings Ltd (ADR) more attractive to investors looking for a new addition to their portfolio.

Medicure Inc’s Value Grade

Value Grade:

Medicure Inc. is a pharmaceutical company. It is focused on the development and commercialization of pharmaceuticals and healthcare products for patients and prescribers in the United States market. The focus of it is the marketing and distribution of AGGRASTAT (tirofiban hydrochloride) injection and ZYPITAMAG (pitavastatin) tablets in the United States, where they are sold through the Company's United States subsidiary, Medicure Pharma Inc. It also operates Marley Drug Inc. (Marley Drug), a pharmacy subsidiary servicing all 50 states, Washington D.C. and Puerto Rico. Marley Drug is committed to improving access to medication for all Americans together with exceptional customer service and free home delivery. AGGRASTAT is indicated to reduce the rate of thrombotic cardiovascular events in patients with non-ST elevation acute coronary syndrome. It also develops pyridoxal 5'-phosphate analogues (P5P Analogues), the processes for their preparation, compositions containing P5P Analogues.

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.

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

Medicure Inc’s price-to-book ratio is higher than its peers. This could make Medicure Inc less attractive for value investors when compared to the industry median at 1.87.

You can read more about Medicure 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.

Molecular Templates Inc’s Value Grade

Value Grade:

Molecular Templates, Inc. is a clinical-stage biopharmaceutical company focused on the discovery and development of targeted biologic therapeutics. The Company’s proprietary drug platform technology, known as engineered toxin bodies (ETBs), leverages the resident biology of a genetically engineered form of Shiga-like Toxin A subunit to create novel therapies with potent and differentiated mechanisms of action for cancer. Its product pipeline includes MT-6402, MT-8421 and MT-0169. MT-6402 is an ETB consisting of a single chain variable fragments (scFv), with affinity for PD-L1, fused to the enzymatically active de-immunized SLTA and a HLA-A*02 class I antigen derived from the human cytomegalovirus (HCMV) pp65 protein. MT-8421, its ETB targeting CTLA-4, along with MT-6402. MT-0169 is designed to destroy CD38+ tumour cells through internalization of CD38 and cell destruction via a novel mechanism of action (enzymatic ribosomal destruction and immunogenic cell death).

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.

Molecular Templates Inc has a Value Score of 71, which is considered to be undervalued.

Molecular Templates Inc’s price-to-book ratio is higher than its peers. This could make Molecular Templates Inc less attractive for value investors when compared to the industry median at 1.87.

You can read more about Molecular Templates 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.

Pulmatrix Inc’s Value Grade

Value Grade:

Pulmatrix, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on the development of novel inhaled therapeutic products intended to prevent and treat respiratory and other diseases with important unmet medical needs using its patented iSPERSE technology. The Company’s proprietary product pipeline includes treatments for central nervous system (CNS) disorders, such as acute migraine and serious lung diseases, such as chronic obstructive pulmonary disease (COPD) and allergic bronchopulmonary aspergillosis (ABPA). The Company’s product candidates are based on its proprietary engineered dry powder delivery platform, iSPERSE, which seeks to improve therapeutic delivery to the lungs by maximizing local concentrations and reducing systemic side effects to improve patient outcomes. The Company’s therapeutic candidates include PUR3100, PUR1800, and PUR1900. PUR3100 is the iSPERSE formulation of dihydroergotamine (DHE), for the treatment of acute migraine.

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.

Pulmatrix Inc has a Value Score of 94, which is considered to be undervalued.

Pulmatrix Inc’s price-to-book ratio is higher than its peers. This could make Pulmatrix Inc less attractive for value investors when compared to the industry median at 1.87.

You can read more about Pulmatrix 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.

Tenax Therapeutics Inc’s Value Grade

Value Grade:

Tenax Therapeutics, Inc. is a Phase 3 development-stage pharmaceutical company. The Company is focused on identifying, developing, and commercializing products that address cardiovascular and pulmonary diseases with high unmet medical needs. The Company's products include TNX-201 (oral enteric coated imatinib) and TNX-103 (oral levosimendan). The Company is developing dosing and a formulation of imatinib mesylate, a kinase inhibitor for the treatment of pulmonary arterial hypertension (PAH). The Company’s other programs include TNX-101 (IV), TNX-102 (subcutaneous) and TNX-103 (oral) levosimendan. Levosimendan is a calcium sensitizer/K-ATP activator developed for intravenous use in hospitalized patients with acutely decompensated heart failure. The Company has completed the Phase II trial of levosimendan in patients with PH and heart failure with preserved ejection fraction (HFpEF).

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.

Tenax Therapeutics Inc has a Value Score of 65, which is considered to be undervalued.

Tenax Therapeutics Inc’s price-to-book ratio is higher than its peers. This could make Tenax Therapeutics Inc less attractive for value investors when compared to the industry median at 1.87.

You can read more about Tenax 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.

Other Biotechnology & Medical Research 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 Biotechnology & Medical Research stocks as well as other industrys.

Choosing Which of the 5 Best Biotechnology & Medical Research 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.

• Connect Biopharma Holdings Ltd (ADR) stock has a Value Grade of A.
• Medicure Inc stock has a Value Grade of A.
• Molecular Templates Inc stock has a Value Grade of B.
• Pulmatrix Inc stock has a Value Grade of A.
• Tenax Therapeutics 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 Biotechnology & Medical Research 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 Biotechnology & Medical Research Stocks

Want to learn more about Biotechnology & Medical Research 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 Biotechnology & Medical Research Stocks for Tuesday, October 01
• 5 Undervalued Biotechnology & Medical Research Stocks for Monday, September 30
• Why AnaptysBio Inc’s (ANAB) Stock Is Up 5.11%
• Why CareDx Inc’s (CDNA) Stock Is Up 5.13%

AAII Disclaimer

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