Many investors consider the health care sector to be a great place to be in for the long-term. The aging of the world's population, pharmaceutical breakthroughs, and medical research discoveries are all expected to be growth drivers for some time.
But putting 2021 under the microscope, there are some particularly compelling stocks that look like they can double by the end of the year if not sooner. These health care companies have the near-term catalysts and support from sell-side analysts that suggest big gains are ahead.
Is Grifols Stock Undervalued?
Based in Barcelona, Grifols (NASDAQ:GRFS) is a jack-of-all-trades when it comes to health care. Its specialties span four divisions—Bioscience, Bio Supplies, Diagnostic, and Hospital.
While it is headquartered in Spain, almost three-fourths of its workforce is in the United States. With a presence in 30 countries and manufacturing facilities in 16, the company provides products and services that improve the health of people around the world.
Grifols is best known for being a global leader in the fields of plasma-derived medicines and transfusion medicine. It has the world's largest network of plasma donation centers through which it produces plasma-based medicines that treat rare, chronic, and life-threatening medical conditions.
It also partners with blood banks and hospital transfusion centers to provide safe, compatible blood delivery solutions. Grifols' services run the full gamut of the transfusion process from collection and screening to blood typing and transfusion.
Analysts generally like Grifols stock due to an improving outlook for plasma collections globally and its inexpensive valuation. It trades for just 11x forward earnings compared to 17x for the industry average. In December, Morgan Stanley reiterated its buy rating on Grifols and gave the ADR a price target that equates to 129% upside based on current levels.
Is Immunovant Stock Oversold?
Turning from a company that has been around for over 100 years in Grifols, to one that has traded publicly for less than 100 weeks we arrive at Immunovant (NASDAQ:IMVT).
After making its June 2019 market debut at less than $10 per share, Immunovant soared to as high as $53.75 in November 2020. Now riding a three-month losing streak and trading at less than $25 per share, the selloff looks overdone.
Immunovant is a biotech company whose main product candidate, IMVT-1401, is a treatment for several advanced immunoglobin diseases—myasthenia gravis (MG), thyroid eye disease (TED), and warm autoimmune hemolytic anemia (WAIHA). If it can continue to progress down the development pipeline, IMVT-1401 would represent a less invasive treatment alternative to the products that are currently on the market.
Aside from favorable news related to its lead candidate, a potential catalyst that can spark a turnaround is the company's plan to announce three new indications for IMVT-1401 by this summer.
Like many early stage biotechs, Immunovant is yet to have any approved products and has no revenue. So, investors would be taking a leap of faith on the prospects of its portfolio.
It may be a leap worth taking. Of the dozen analysts that cover Immunovant, all but one call it a 'buy'—and the firm with the sole 'hold' rating has a price target that represents almost 50% upside. The rest of the bullish herd has price targets ranging from $33 to $64 for this $24 stock.
Is Athenex Stock a Buy?
Athenex (NASDAQ:ATNX) is another interesting health care stock with the potential to be a two-bagger. This week Evercore started coverage of Athenex with a 'buy' rating making it five out of five analysts that have taken a bullish stance on the biopharmaceutical company.
With operations in the U.S., Latin America, U.K., China, Hong Kong, and Taiwan, Athenex develops therapies for the treatment of cancer. Outside of its oncology portfolio, what makes Athenex different is that its supply chain and commercial infrastructure are in-house. This lowers the supply chain risk for its oncology drugs and holds the potential for lower costs and greater shareholder value.
Last year, the Food & Drug Administration (FDA) accepted the company's new drug application (NDA) for oral paclitaxel, an alternative to traditional chemotherapy. While plenty more work remains, the fact that the FDA granted a priority review for the drug candidate increases the likelihood of eventual FDA approval.
Athenex's oral paclitaxel recently completed a phase 3 trial studying the drug candidate's effectiveness in metastatic breast cancer. The results showed lower incidence of neuropathy and alopecia and represented a major step forward.
Athenex's Orascovery program has potential applications in other forms of breast cancer as well as for the treatment of gastric cancer and solid tumors. The company's other programs include potential treatments for psoriasis, skin cancers, psoriasis, and glioblastoma. It does have one FDA approved product in Tiranibulin, an ointment for actinic keratosis.
Athenex is trading around $14 per share and the average analyst price target is about $26. Given the success of its late-stage breast cancer candidate and opportunities in other areas of oncology, Athenex appears to be one of the most promising pharmaceutical investments.
Before you consider Grifols, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Grifols wasn't on the list.
While Grifols currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
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