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 Retailers - Drug 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.

Latest Retailers - Drug Stock News

Before choosing which top Retailers - Drug stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

Our 12-month outlook on the drug retail subindustry is neutral. Over the longer term, we have a positive outlook, in part due to an aging overall population, increases in life expectancy, increases in the availability of generic drugs, the continued development of innovative drugs, and increases in the number of individuals who are health insured. However, over the next 12 months, we have a neutral outlook as the competitive environment is evolving and intensifying and shifting consumer habits amid the pandemic could further pressure margins for drug retailers. Drug retailers like Walgreens, CVS, and Rite Aid are playing a part in the Covid-19 testing and vaccination process. Walgreens and CVS played an early role as they partnered with the CDC to offer on-site Covid-19 vaccination services for residents of nursing homes and assisted living facilities. Now, 21 national pharmacies are playing a role to vaccinate the general population. Drug retailers have seen increased foot traffic because of its Covid-19 vaccination services. This has benefited non-pharmacy sales, including beauty products, consumables, and general merchandise items. As for the direct benefits of administering the vaccine, the economics are a bit unclear. Medicare, the health insurance program paid by the government for people mostly 65 or older, will reimburse health providers $40 per shot. However, for other private third-party payors, it is unclear what the reimbursement rate will be, although drug retailers are confident all payors will eventually pay $40 per shot. Drug retailers are now seeing Covid-19 vaccination rates slow, which will be a headwind as this means less reimbursement from Medicare and other third-party payors, as well as less foot traffic within stores. The good news is drug retailers expect to play a role when it comes to providing Covid-19 booster shots. Yet, it is unclear how long these benefits will last. The competitive landscape in retail pharmacy is intensifying and evolving, particularly since Amazon recently expanded its pharmacy offerings with its new Amazon Pharmacy service. We think Amazon Pharmacy has the ability to transform the way millions of people purchase prescription drugs given that there are over 120M Amazon Prime members in the U.S. These households will now be able to purchase certain prescription drugs online, often times at a discount when paying without insurance because of Amazon’s established infrastructre and established supply chains. 

Why Focus on Undervalued Retailers - Drug 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 Retailers - Drug 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 Retailers - Drug industry for Wednesday, March 08, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Retailers - Drug 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.

Marimed Inc’s Value Grade

Value Grade:

MariMed Inc. is a multi-state cannabis operator in the United States cannabis industry. The Company develops, operates, manages, and optimizes facilities for the cultivation, production, and dispensing of medicinal and recreational cannabis. The Company also licenses its brands of cannabis and hemp-infused products, along with other brands in domestic markets and overseas. The Company also provides its clients with ongoing regulatory, accounting, real estate, human resources, and administrative services. The Company markets its cannabis flowers and concentrates under the Nature’s Heritage brand; cannabis-infused chewable tables and powder drink mixes under the brand names Kalm Fusion and K Fusion; all-natural fruit chews under the Betty’s Eddies brand; and brownies, cookies, and other social sweets under the Bubby’s Baked brand. The Company is also engaged in the cultivation, manufacturing, and distribution of its retail cannabis operations in Illinois.

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.

Marimed Inc has a Value Score of 98, which is considered to be undervalued.

When you look at Marimed Inc’s price-to-sales ratio at 0.42 compared to the industry median at 0.25, this company has a higher price relative to revenue compared to its peers. This could make Marimed Inc’s stock less attractive for value investors.

Marimed Inc’s price-earnings ratio is 7.47 compared to the industry median at 9.38. This means it has a lower share price relative to earnings compared to its peers. This could make Marimed Inc more attractive for value investors.

Now, let’s assess Marimed Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 3.8, when compared to the industry median of 9.6, 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. Marimed Inc’s shareholder yield is higher than its industry median ratio of (6.51%). 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. Marimed Inc’s price-to-book ratio is lower than its industry median ratio of 1.12. This could make Marimed Inc more attractive to investors looking for a new addition to their portfolio.

Progressive Care Inc’s Value Grade

Value Grade:

Progressive Care Inc. is a personalized healthcare services and technology company. The Company provides prescription pharmaceuticals and risk and data management services to healthcare organizations and providers. The Company provides prescription pharmaceuticals, compounded medications, tele-pharmacy services, anti-retroviral medications, medication therapy management, the supply of prescription medications to long-term care facilities, contracted pharmacy services for 340B Covered Entities under the 340B Drug Discount Pricing Program, and health practice risk management. It offers a range of solutions to address the dispensing, delivery, dosing, and reimbursement of clinically intensive drugs. The Company also provides patient health risk reviews and free same-day delivery. It obtains pharmaceutical and other products from wholesale drug distributors. The Company sells to a range of customers, including various managed care organizations within both the private and public sectors.

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.

Progressive Care Inc has a Value Score of 80, which is considered to be undervalued.

You can read more about Progressive Care 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.

SunLink Health Systems, Inc.’s Value Grade

Value Grade:

SunLink Health Systems, Inc., through subsidiaries, owns businesses which provide healthcare products and services in various markets in the southeastern United States. Its segments include Healthcare Services and Pharmacy. The Healthcare Services segment is operated through its subsidiary, which owns and operates Trace Regional Medical Center (Trace), an approximately 49-licensed-bed acute care hospital, located in Houston, Mississippi, which includes a 26-bed geriatric psychiatry unit, four clinics and a 66-bed extended care and rehabilitation center, which also is a skilled nursing facility. Trace focuses primarily on senior healthcare services. The Pharmacy segment is operated through its subsidiary, SunLink ScriptsRx, LLC, which owns and operates a pharmacy business in Louisiana with four operational areas include retail pharmacy products and services, institutional pharmacy services, non-institutional pharmacy services and durable medical equipment products and services (DME).

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.

SunLink Health Systems, Inc. has a Value Score of 96, which is considered to be undervalued.

SunLink Health Systems, Inc.’s price-to-book ratio is higher than its peers. This could make SunLink Health Systems, Inc. less attractive for value investors when compared to the industry median at 1.12.

You can read more about SunLink 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.

Other Retailers - Drug 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 Retailers - Drug stocks as well as other industrys.

Choosing Which of the 3 Best Retailers - Drug 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.

• Marimed Inc stock has a Value Grade of A.
• Progressive Care Inc stock has a Value Grade of B.
• SunLink Health Systems, Inc. stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Retailers - Drug 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 Retailers - Drug Stocks

Want to learn more about Retailers - Drug 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 Retailers - Drug Stocks for Wednesday, March 08
• 4 Undervalued Retailers - Drug Stocks for Tuesday, March 07
• 4 Undervalued Retailers - Drug Stocks for Monday, March 06
• Why Petmed Express Inc’s (PETS) Stock Is Down 4.93%

AAII Disclaimer

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