Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Medical Equipment, Supplies & Distribution 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 Medical Equipment, Supplies & Distribution Stock News

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

There has been an increase in demand for medical devices in recent years, largely driven by process innovations, emerging technology and an aging population. In 2021, the medical equipment industry should positively benefit from coronavirus test sales, new product sales and growing exposure in emerging markets. Companies selling coronavirus tests are expected to have strong sales for the year as people return to offices and schools. There has also been progress made by vaccine campaigns. Analysts expect to see a recovery in elective procedure volumes to pre-pandemic levels, which experienced particularly harsh headwinds in 2020 due to the pandemic. As a result, hospitals likely have a backlog of deferred procedures to work through. However, recovery for the industry could be relatively impacted by the financial pressures facing consumers, which may prevent people from seeking medical attention. In the long term, analysts see positive fundamental trends for medical device manufacturers, including global demand for cost-effective value-based health care, gaining demographics and rising research and development (R&D) investments, which have resulted in a steady stream of innovative products and revenue growth.

Why Focus on Undervalued Medical Equipment, Supplies & Distribution 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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4 Undervalued Medical Equipment, Supplies & Distribution Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Medical Equipment, Supplies & Distribution industry for Tuesday, May 02, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Medical Equipment, Supplies & Distribution 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.

Embecta Corp’s Value Grade

Value Grade:

Embecta Corp. is a global medical device company. The Company is focused on providing solutions to people living with diabetes. The Company has a portfolio of products, including a range of pen needles, syringes and safety injection devices, which are complemented by its digital application designed to assist people with managing their diabetes. Its pen needles are sterile, single-use, medical devices, designed to be used in conjunction with pen injectors that inject insulin or other diabetes medications. The Company also sells safety pen needles, which have shields on both ends of the cannula that automatically deploy after the injection to help prevent needlestick exposure and injury during injection and disposal. In addition to pen needles, it sells sterile, single-use insulin syringes, which are used to inject insulin drawn from insulin vials. It distributes its products through a variety of channels, including retail, hospitals, pharmacies and other institutional channels.

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.

Embecta Corp has a Value Score of 82, which is considered to be undervalued.

When you look at Embecta Corp’s price-to-sales ratio at 1.48 compared to the industry median at 3.61, this company has a lower price relative to revenue compared to its peers. This could make Embecta Corp’s stock more attractive for value investors.

Embecta Corp’s price-earnings ratio is 10.53 compared to the industry median at 38.53. This means it has a lower share price relative to earnings compared to its peers. This could make Embecta Corp more attractive for value investors.

Now, let’s assess Embecta Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 6.5, when compared to the industry median of 15.9, 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. Embecta Corp’s shareholder yield is higher than its industry median ratio of (1.46%). 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.

Lastly, let’s take a look at Embecta Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Embecta Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 59.18. This could make Embecta Corp more attractive because the lower P/FCF ratio indicates that Embecta Corp 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.

Fuse Medical Inc’s Value Grade

Value Grade:

Fuse Medical, Inc. is a manufacturer and distributor of medical devices in the United States. The Company provides a range of a portfolio of orthopedic implants, including foot and ankle, orthopedics, sports medicine and spine. It also provides a range of osteo-biologics and regenerative products, which include human allografts, tendons, synthetic skin and bone substitute materials, and regenerative tissues. Its foot and ankle product offerings include internal and external fixation for forefoot, midfoot and hindfoot reconstruction. Its orthopedics offer joint reconstruction systems for upper and lower extremities, which include the sterizo total knee, tibial revision, and total hip replacement systems, as well as the arrow total and reverse total shoulder system. Its sports medicine offers a line of fuse suture anchors and interference screws, as well as multiple products for soft tissue fixation augmentation. Its spine offers spinal products for cervical and thoracolumbar fusion.

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.

Fuse Medical Inc has a Value Score of 97, which is considered to be undervalued.

Fuse Medical Inc’s price-earnings ratio is 1.2 compared to the industry median at 38.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Fuse Medical Inc more attractive for value investors.

You can read more about Fuse Medical 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.

Retractable Technologies Inc’s Value Grade

Value Grade:

Retractable Technologies, Inc. designs, develops, manufactures, and markets safety syringes and other safety medical products for the healthcare profession. The Company is focused on the production of injection devices, such as syringes and needles. Its products are marketed under the VanishPoint, Patient Safe, and EasyPoint brands. Its products include VanishPoint 0.5mL insulin syringe; 1mL tuberculin, insulin, and allergy antigen syringes; 0.5mL, 1mL, 2mL, 3mL, 5mL, and 10mL syringes; the small diameter tube adapter; the blood collection tube holder; the allergy tray; the IV safety catheter; the Patient Safe syringes; the Patient Safe Luer Cap; the VanishPoint Blood Collection Set; and the EasyPoint needle and a standard 3mL syringe packaged with an EasyPoint needle. It also sells VanishPoint autodisable syringes in the international market in addition to its other products. It distributes its products throughout the United States through general line and specialty distributors.

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.

Retractable Technologies Inc has a Value Score of 84, which is considered to be undervalued.

Retractable Technologies Inc’s price-earnings ratio is 12.2 compared to the industry median at 38.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Retractable Technologies Inc more attractive for value investors.

Retractable Technologies Inc’s price-to-book ratio is higher than its peers. This could make Retractable Technologies Inc less attractive for value investors when compared to the industry median at 2.71.

You can read more about Retractable 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.

SINTX Technologies Inc’s Value Grade

Value Grade:

SINTX Technologies, Inc. is an advanced ceramics company. The Company is focused on providing solutions in a variety of biomedical, technical, and antipathogenic applications. The Company develops and manufactures ceramics for personnel, aircraft, and vehicle armor. The Company is manufacturing, research, and development of advanced ceramics for external partners. The Company is focusing primarily on the research, development and commercialization of medical devices manufactured with silicon nitride. The Company produces silicon nitride for use in solid silicon nitride, porous silicon nitride, silicon nitride powder, a composite of silicon nitride and polyether ether ketone (PEEK), silicon nitride coating, promotes bone growth, antibacterial, antiviral, antifungal, imaging compatible, hard, strong and resistant to fracture, resistant to wear, and non-corrosive. The Company has manufacturing facilities in Utah and Maryland.

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.

SINTX Technologies Inc has a Value Score of 85, which is considered to be undervalued.

SINTX Technologies Inc’s price-to-book ratio is higher than its peers. This could make SINTX Technologies Inc less attractive for value investors when compared to the industry median at 2.71.

You can read more about SINTX 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.

Other Medical Equipment, Supplies & Distribution 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 Medical Equipment, Supplies & Distribution stocks as well as other industrys.

Choosing Which of the 4 Best Medical Equipment, Supplies & Distribution 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.

• Embecta Corp stock has a Value Grade of A.
• Fuse Medical Inc stock has a Value Grade of A.
• Retractable Technologies Inc stock has a Value Grade of A.
• SINTX Technologies Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 4 undervalued stocks in the Medical Equipment, Supplies & Distribution 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 Medical Equipment, Supplies & Distribution Stocks

Want to learn more about Medical Equipment, Supplies & Distribution 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.

• 4 Undervalued Medical Equipment, Supplies & Distribution Stocks for Tuesday, May 02
• 6 Undervalued Medical Equipment, Supplies & Distribution Stocks for Monday, May 01
• Why Embecta Corp’s (EMBC) Stock Is Up 4.25%
• Why Pulmonx Corp’s (LUNG) Stock Is Up 4.85%

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