Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Pharmaceuticals 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 Pharmaceuticals Stock News

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

The outlook for the Pharmaceuticals sub-industry is positive as the world returns to normalcy and demand for electives and improved medical utilization. COVID-19 therapies, oncology and immunology are essential aspects of pharmaceutical companies. Should COVID-19 variants continue to arise getting a COVID-19 vaccine could become a seasonal phenomenon, much like the flu vaccine. If that were to happen, it would prove to be very lucrative for pharmaceutical companies, as it would generate recurring sales. Recent FDA recommendations, such as approval for a fourth booster dose for those aged 50 or older, suggests we may be moving in this direction. Generic drug makers are expected to continue to struggle due to lower-cost emerging market competition. Despite this, policy risks are on the rise. Lowering drug prices continues to be a bipartisan issue as both parties aim to offer Americans more affordable prices. While this provides uncertainty in the long-term, it is unlikely that legislation will get passed in the near future due to more pressing issues in the political agenda. Year to date through June 3, the S&P Pharmaceuticals Index was up 1.5% vs. a 13.6% decline for the S&P Composite 1500 Index. In 2021, the S&P Pharmaceuticals Index returned a gain of 21.8%, vs. a gain of 26.7% for the S&P Composite 1500.

Why Focus on Undervalued Pharmaceuticals 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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6 Undervalued Pharmaceuticals Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Pharmaceuticals industry for Friday, March 17, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Pharmaceuticals 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.

Chembio Diagnostics Inc’s Value Grade

Value Grade:

Chembio Diagnostics, Inc. develops and commercializes point-of-care diagnostic tests used for the rapid detection and diagnosis of infectious diseases, including sexually transmitted disease, insect vector and tropical disease, COVID-19, and other viral and bacterial infections, enabling expedited treatment. Its product portfolio is based upon its DPP technology, a diagnostic platform that provides results in 15 to 20 minutes using fingertip blood, nasal swabs, and other sample types. The DPP technology platform addresses the rapid diagnostic test market, which includes infectious diseases such as sexually transmitted infections (STIs) and human immunodeficiency virus (HIV), gastroenterology, and women's health. Its products include COVID-19 Antibody Test System, COVID-19 Antigen Test System, COVID-19 and Influenza Respiratory Antigen Panel Test System and HIV-Syphilis Diagnostic Test Systems, among others. It is also targeting lateral flow test solutions for infectious diseases.

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.

Chembio Diagnostics Inc has a Value Score of 75, which is considered to be undervalued.

When you look at Chembio Diagnostics Inc’s price-to-sales ratio at 0.18 compared to the industry median at 3.07, this company has a lower price relative to revenue compared to its peers. This could make Chembio Diagnostics Inc’s stock more attractive for value investors.

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. Chembio Diagnostics Inc’s shareholder yield is lower than its industry median ratio of (3.28%). 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. Chembio Diagnostics Inc’s price-to-book ratio is lower than its industry median ratio of 1.43. This could make Chembio Diagnostics Inc more attractive to investors looking for a new addition to their portfolio.

Cosmos Health Inc’s Value Grade

Value Grade:

Cosmos Health Inc., formerly Cosmos Holdings Inc., is a pharmaceutical company. The Company is engaged in providing nutraceuticals and distributors of pharmaceuticals, branded generics, over-the-counter (OTC) medications, and medical devices. The Company is engaged in the nutraceuticals sector through its own proprietary lines of products Sky Premium Life and Mediterranation. The Company is engaged in the pharmaceutical sector through the provision of a broad line of branded generics and OTC medications and is involved in the healthcare distribution sector through its subsidiaries in Greece and the United Kingdom serving retail pharmacies and wholesale distributors. It is also focused on the research and development (R&D;) of novel patented nutraceuticals (IP) and root extracts as well as on the R&D; of complex generics and OTC products. It has developed a global distribution platform. It has distribution centers in Thessaloniki and Athens, Greece and Harlow, United Kingdom.

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.

Cosmos Health Inc has a Value Score of 61, which is considered to be undervalued.

Cosmos Health Inc’s price-to-book ratio is higher than its peers. This could make Cosmos Health Inc less attractive for value investors when compared to the industry median at 1.43.

You can read more about Cosmos 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.

PetIQ Inc’s Value Grade

Value Grade:

PetIQ, Inc. is a pet medication and wellness company, which delivers veterinary products and services. The Company is engaged with customers through approximately 60,000 points of distribution across retail and e-commerce channels with its branded and distributed medications, as well as health and wellness items, which are further supported by its medications manufacturing facility in Omaha, Nebraska and health and wellness manufacturing facility in Springville, Utah. Its national veterinarian service platform operates in approximately 2,900 retail partner locations in 42 states provides veterinary wellness services. The Company has two segments: Products and Services. The Products segment consists of its manufacturing and distribution businesses. The Services segment consists of veterinary services and related product sales provided by the Company directly to consumers. Its products offering for dogs and cats includes pet Rx medications, OTC medications and wellness products.

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.

PetIQ Inc has a Value Score of 69, which is considered to be undervalued.

PetIQ Inc’s price-to-book ratio is lower than its peers. This could make PetIQ Inc more attractive for value investors when compared to the industry median at 1.43.

You can read more about PetIQ 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.

Medicine Man Technologies Inc’s Value Grade

Value Grade:

Medicine Man Technologies Inc. is engaged in the manufacture, possession, sale and distribution of cannabis in the adult-use cannabis marketplace in the State of Colorado. The Company operates through three segments: Retail, Wholesale and Other. Retail segment includes its Retail dispensaries. Its dispensaries sales a variety of cannabis products directly to consumers. These products include loose flower, concentrates, edibles, pre-rolls, topicals, and other associated cannabis products produced by a variety of cannabis vendors throughout Colorado and New Mexico. Wholesale segment includes Purplebees, Elemental, Colorado and New Mexico Cultivation. Purplebees produces cannabis products used in some of the edible products across the state. Elemental produces cannabis products, using cannabis and biomass produced by R. Greenleaf cultivation sites, such as edibles and vapes sold in R. Greenleaf dispensaries. Other segment includes Success Nutrients, Big Tomato, Bioscienses and Corporate.

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.

Medicine Man Technologies Inc has a Value Score of 80, which is considered to be undervalued.

Medicine Man Technologies Inc’s price-to-book ratio is higher than its peers. This could make Medicine Man Technologies Inc less attractive for value investors when compared to the industry median at 1.43.

You can read more about Medicine Man Technologies 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.

Silo Pharma Inc’s Value Grade

Value Grade:

Silo Pharma, Inc. is a developmental-stage biopharmaceutical company. It is focused on merging traditional therapeutics with psychedelic research for people suffering from indications, such as depression, post-traumatic stress disorder, Parkinson’s and other neurological disorders. It focuses on identifying assets to license and fund the research for the well-being of patients and the healthcare industry. It has entered into a license agreement with the University of Baltimore, Maryland, and has entered into a joint venture with Zylo Therapeutics, Inc., with respect to certain intellectual property and technology that may be used for delivery of potential novel treatments. It has entered into a sponsored research agreement with Columbia University, pursuant to which it has been granted an option to license certain patents and inventions relating to the treatment of Alzheimer’s disease and stress-induced affective disorders using Ketamine in combination with certain other compounds.

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.

Silo Pharma Inc has a Value Score of 93, which is considered to be undervalued.

Silo Pharma Inc’s price-to-book ratio is higher than its peers. This could make Silo Pharma Inc less attractive for value investors when compared to the industry median at 1.43.

You can read more about Silo Pharma 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.

China SXT Pharmaceuticals Inc’s Value Grade

Value Grade:

China SXT Pharmaceuticals Inc is a China-based pharmaceutical company that focuses on the research, development, manufacture, marketing and sales of Traditional Chinese Medicine Pieces (TCMP). The Company develops, manufactures and sells three types of TCMP products: advanced TCMP, fine TCMP and regular TCMP, and TCM Homologous Supplements (TCMHS) products. The Company sells its TCMP products under three brand names such as Suxuangtang, Hui Chun Tang and Tong Ren Tang. Most of its products are sold on a prescription basis across China.

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.

China SXT Pharmaceuticals Inc has a Value Score of 86, which is considered to be undervalued.

China SXT Pharmaceuticals Inc’s price-to-book ratio is higher than its peers. This could make China SXT Pharmaceuticals Inc less attractive for value investors when compared to the industry median at 1.43.

You can read more about China SXT Pharmaceuticals 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 Pharmaceuticals 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 Pharmaceuticals stocks as well as other industrys.

Choosing Which of the 6 Best Pharmaceuticals 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.

• Chembio Diagnostics Inc stock has a Value Grade of B.
• Cosmos Health Inc stock has a Value Grade of B.
• PetIQ Inc stock has a Value Grade of B.
• Medicine Man Technologies Inc stock has a Value Grade of B.
• Silo Pharma Inc stock has a Value Grade of A.
• China SXT Pharmaceuticals Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 6 undervalued stocks in the Pharmaceuticals 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 Pharmaceuticals Stocks

Want to learn more about Pharmaceuticals 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.

• 6 Undervalued Pharmaceuticals Stocks for Friday, March 17
• Which Is a Better Investment, Bausch Health Companies Inc or Teva Pharmaceutical Industries Ltd (ADR) Stock?
• Which Is a Better Investment, Corcept Therapeutics Incorporated or Teva Pharmaceutical Industries Ltd (ADR) Stock?
• Which Is a Better Investment, Dr Reddy's Laboratories Ltd (ADR) or Teva Pharmaceutical Industries Ltd (ADR) Stock?

AAII Disclaimer

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