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.

Latest Biotechnology & Medical Research Stock News

Before choosing which top Biotechnology & Medical Research 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 Biotechnology and Medical Research sub-industry has a positive outlook, a historically defensive sub-industry. Drug sales are anticipated to have high growth, primarily driven by COVID-19 therapeutics, the continued adoption of many new and innovative therapies, a favorable M&A environment, and a low prevalence of patent expirations in 2022. Additionally, companies could see prescription growth pick up as in-person physician visits return to pre-pandemic levels. As COVID-19 variants have emerged, vaccine boosters have been offered in order to increase efficacy. Due to this, repeat vaccinations will likely be necessary for lifelong immunity which would provide a long-lasting and significant source of revenue for lead vaccine developers. Aside from vaccines, the biotech industry is dependent on the volume of new therapy approvals. The FDA’s heavy focus on COVID-19 could slow the approvals on non-COVID-19 therapies. Despite this, the biotech industry will likely see promising sales growth over the next five years as it usually takes at least five years for new drugs to reach peak sales levels. Approval activity has also been on the rise recently. Mergers and acquisitions activity is expected to remain low as a more activist Federal Trade Commission (led by Lina Khan) could be more skeptical of proposed mergers. Year to date through June 30, the S&P 1500 Biotech Index was down 1.6%, vs. a 20.5% decline for the S&P 1500 Composite Index. In 2021, the Biotech Index rose 8.2%, vs. a 26.7% gain for the Composite Index.

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 Friday, September 08, 2023. 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.

Chemomab Therapeutics Ltd - ADR’s Value Grade

Value Grade:

Chemomab Therapeutics Ltd, formerly known as Anchiano Therapeutics Ltd, is a Israel-based biopharmaceutical company. The Company specializes in the development of patient oriented targeted therapy for the treatment of a wide range of cancers. Its therapeutic and diagnostic technology, BC-819, constitutes a search paradigm for the targeted destruction of cancer cells with no effect on surrounding tissue and no observed side effects for long-term, safe treatment and prevention of cancer. The patient oriented targeted therapy approach is based on the identification of particular genes that are expressed only in tumors.

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.

Chemomab Therapeutics Ltd - ADR has a Value Score of 99, which is considered to be undervalued.

Now, let’s assess Chemomab Therapeutics Ltd - ADR’s EV/EBITDA ratio, also known as enterprise multiple. At 0.3, when compared to the industry median of 0.8, 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. Chemomab Therapeutics Ltd - ADR’s shareholder yield is higher than its industry median ratio of (7.65%). 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. Chemomab Therapeutics Ltd - ADR’s price-to-book ratio is lower than its industry median ratio of 1.52. This could make Chemomab Therapeutics Ltd - ADR more attractive to investors looking for a new addition to their portfolio.

Freeline Therapeutics Holdings PLC (ADR)’s Value Grade

Value Grade:

Freeline Therapeutics Holdings plc is a United Kingdom-based clinical-stage biotechnology company. The Company is developing transformative adeno-associated virus (AAV) vector-mediated gene therapies. It is focused on improving patient lives through one-time treatments for chronic debilitating diseases. It uses its rationally designed AAV vector and capsid (AAVS3), along with promoters and transgenes, to deliver a functional copy of a therapeutic gene into human liver cells, thereby expressing a persistent functional level of the missing or dysfunctional protein into the patient's bloodstream. Therapeutic AAV vectors consist of two main components, the capsid and the expression cassette (that contains the gene and the promoter). The Company is advancing clinical programs in Fabry disease and Gaucher disease Type 1. The Company's pipeline includes Fabry Disease FLT190 for the treatment of Fabry disease and Gaucher Disease FLT201 for the treatment of type 1 Gaucher disease.

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.

Freeline Therapeutics Holdings PLC (ADR) has a Value Score of 87, which is considered to be undervalued.

Freeline Therapeutics Holdings PLC (ADR)’s price-to-book ratio is higher than its peers. This could make Freeline Therapeutics Holdings PLC (ADR) less attractive for value investors when compared to the industry median at 1.52.

You can read more about Freeline Therapeutics Holdings PLC (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.

NovaBay Pharmaceuticals Inc’s Value Grade

Value Grade:

NovaBay Pharmaceuticals, Inc. is a pharmaceutical company. The Company develops and sells scientifically created and clinically proven eyecare and skincare products. Its product, Avenova Antimicrobial Lid & Lash Solution is used for blepharitis and dry-eye disease and is also available directly to eyecare consumers through online distribution. Its trademarks include Avenova, CelleRx, PhaseOne, NeutroPhase, DERMAdoctor, Kakadu C, AINT Misbehavin, KP Duty, and depictions of Dr. Audrey Kunin. Avenova Spray has broad antimicrobial properties as it removes foreign material including microorganisms and debris from the skin around the eye, including the eyelid. The Company, through its subsidiary DERMAdoctor, LLC, offers approximately 30 dermatologist-developed products targeting common skin concerns, ranging from aging and blemishes to dry skin, perspiration, and keratosis pilaris.

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.

NovaBay Pharmaceuticals Inc has a Value Score of 78, which is considered to be undervalued.

NovaBay Pharmaceuticals Inc’s price-to-book ratio is higher than its peers. This could make NovaBay Pharmaceuticals Inc less attractive for value investors when compared to the industry median at 1.52.

You can read more about NovaBay 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.

Invitae Corp’s Value Grade

Value Grade:

Invitae Corporation is a medical genetics company. The Company is engaged in delivering genetic testing services, digital health solutions, and health data services that support a lifetime of patient care and improved outcomes. It offers genetic testing across multiple clinical areas, including hereditary cancer, precision oncology, women's health, rare diseases and pharmacogenomics. It applies proprietary design, process automation, robotics and bioinformatics software solutions to expand the use and impact of genetic information in sample processing and complex variant interpretation, allowing medical interpretation at scale. The Company also utilizes digital health solutions to improve ease-of-use and to deliver actionable information about risk, prevention, treatment, and monitoring. The Company has served over 3.6 million patients, and over 2.2 million of those patients have made their information available for data sharing.

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.

Invitae Corp has a Value Score of 75, which is considered to be undervalued.

You can read more about Invitae Corp’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.

Palisade Bio Inc’s Value Grade

Value Grade:

Palisade Bio, Inc. is a biopharmaceutical company focused on developing therapeutics that protect the integrity of the intestinal barrier. The Company?s approach is founded on the discovery that damage to the intestinal epithelial barrier can result in the leakage of digestive enzymes from the gastrointestinal (GI) tract into the peritoneal cavity, which can damage tissues and promote inflammation, causing a broad array of acute and chronic conditions. Its lead therapeutic candidate, LB1148, is an oral liquid formulation of the well-characterized digestive enzyme inhibitor tranexamic acid (TXA), which is being developed for administration prior to surgeries that are at risk of disrupting the intestinal epithelial barrier. LB1148 is formulated as an aqueous solution for oral (enteral) administration. In addition to TXA, the LB1148 formulation contains polyethylene glycol, carbohydrates, and electrolytes.

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.

Palisade Bio Inc has a Value Score of 76, which is considered to be undervalued.

Palisade Bio Inc’s price-to-book ratio is higher than its peers. This could make Palisade Bio Inc less attractive for value investors when compared to the industry median at 1.52.

You can read more about Palisade Bio 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.

• Chemomab Therapeutics Ltd - ADR stock has a Value Grade of A.
• Freeline Therapeutics Holdings PLC (ADR) stock has a Value Grade of A.
• NovaBay Pharmaceuticals Inc stock has a Value Grade of B.
• Invitae Corp stock has a Value Grade of B.
• Palisade Bio 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 Friday, September 08
• What You Need to Know About Ascendis Pharma A/S's Q2 Earnings
• 6 Undervalued Biotechnology & Medical Research Stocks for Thursday, September 07
• Why Adaptive Biotechnologies Corp’s (ADPT) Stock Is Down 4.11%

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