3 Cheap Pharmaceutical Stocks to Grab Now

: IPSEY | Ipsen S.A. News, Ratings, and Charts

IPSEY – The pharmaceutical sector received much investor attention amid the COVID-19 pandemic and their interest in this sector is expected to continue given the growing demand for pharmaceutical products and solutions. As such, we think it could be smart to bet on relatively undervalued pharma stocks Ipsen (IPSEY), H. Lundbeck (HLUYY), and Ironwood (IRWD). They are well positioned to capitalize on the industry tailwinds.

The pharmaceutical industry has been the beneficiary of significant investor attention amid the COVID-19 pandemic as society turned to its products to fight the coronavirus.   Investors’ interest in pharmaceutical stocks is evident in Invesco Dynamic Pharmaceuticals ETF’s (PJP) 24.4% gains over the past year. However, many investors have rotated out of expensive growth stocks from the pharma space over the past few months to capitalize on the economic recovery by betting on the cyclical stocks.

This has created an opportunity to buy fundamentally strong pharmaceutical stocks at cheaper prices. With many patients rescheduling their postponed visits to the hospitals, and pharma companies increasing their spending on research and development to find treatments for other critical diseases, the industry is expected to continue growing. According to Globe Newswire, the pharmaceutical market’s value is expected to reach $2,151.1 billion by 2027.

So, we think it is wise to bet now on companies such as Ipsen S.A. (IPSEY), H. Lundbeck A/S (HLUYY), and Ironwood Pharmaceuticals, Inc. (IRWD) because they currently look significantly undervalued.

Click here to checkout our Healthcare Sector Report for 2021

Ipsen S.A. (IPSEY)

Based in France, biopharmaceutical company IPSEY provides drugs in the areas of oncology, neuroscience, gastroenterology, cognitive disorders, and rare diseases. The company operates through two segments—Specialty Care and Consumer Healthcare.

IPSEY’s total sales for the first quarter, ended March 31, 2021 were €658.50 million ($804.99 million), which represents a 5.5% year-over-year rise. Its sales from its Specialty Care segment increased 6.4% year-over-year at CER to €611.50 million ($747.54 million). Its sales from North America came in at €207 million ($253.05 million), up 4.8% year-over-year at CER. This can be  attributed primarily to continued strong demand for its Somatuline and Cabometyx products.

In terms of forward EV/S, IPSEY’s 2.81x is 57.6% lower than the 6.62x industry average. The stock’s 2.14x forward Price/Sales is also lower than the 8.00x industry average. Analysts expect its annual revenue to increase 4.9% year-over-year to $3.30 billion in its fiscal year 2021.

IPSEY announced on May 11 that it had exercised its option to collaborate with Exelixis, Inc. (EXEL) in the pivotal COSMIC-311 Phase III trial for the evaluation of Cabometyx. Results from the planned Phase III interim analysis of COSMIC-311 showed that the trial met the co-primary endpoint of demonstrating significant improvement in progression-free survival. So, the company appears to have immense potential to generate significant returns in the coming quarters should this collaboration be successful. The stock has rallied 35.5% over the past year.

IPSEY’s POWR Ratings reflect this promising outlook with an overall B rating, which equates to Buy. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

The stock has an A grade for Stability and Value and a B grade for Growth and Quality. Click here to see the additional POWR ratings for IPSEY (Sentiment and Momentum).

IPSEY is ranked #7 of 230 stocks in the Medical-Pharmaceuticals industry.

  1. Lundbeck A/S (HLUYY)

Headquartered in Valby, Denmark, HLUYY researches, develops, manufactures and markets pharmaceutical products for the treatment of brain disorders, such as Alzheimer’s disease, Bipolar disorder, and depression. Its product portfolio includes Cipralex, Ebixa and Xenazine.

The company’s revenue from its international markets segment increased 44.7% sequentially to DKK 1.16 billion ($191.02 billion) for the fiscal first quarter ended March 31, 2021. HLUYY’s EBIT for the quarter increased 235.4% year-over-year to DKK 882 million ($144.99 million). Its EPS was DKK 3.13 ($0.51), up 578% from the prior-year period.

In terms of forward EV/S, HLUYY’s 2.61x is 60.6% lower than the 6.62x industry average. The stock’s 16.84x forward EV/EBIT is 16.7% lower than the 20.21x industry average. Its annual revenue is expected to be $2.89 billion in  2022, which represents a 6% year-over-year rise. It also surpassed EPS estimates in three of the trailing four quarters.

Following favorable results from an independent interim analysis, HLUYY and Otsuka Holdings Co., Ltd. (OTSKY) announced on April 13 that they will continue the recruitment of patients for the phase III clinical trial of brexpiprazole, which is used in the treatment of Alzheimer. The stock has gained 2.2% over the past month to close yesterday’s trading session at $32.04.

HLUYY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. It has an A grade for Value, and a B grade for Quality and Stability. Click here to access HLUYY’s ratings for Momentum, Growth and Sentiment.

HLUYY is ranked #18 in the  Medical-Pharmaceuticals industry.

Ironwood Pharmaceuticals, Inc. (IRWD)

Biotechnology company IRWD is focused on the development and commercialization of gastrointestinal (GI) products. Its product, LINZESS, which is used in the treatment of irritable bowel syndrome (IBS) and chronic constipation, is sold in the U.S., Mexico, Canada and certain European countries. It is also sold under the brand name Constella.

The company’s net sales came in at $88.84 million for the first quarter, ended March 31, 2021, representing an 11.1% year-over year rise. IRWD’s net income for the quarter came in at $39.93 million, up 1,093.6% from the prior-year period. Its EPS increased 1,150% year-over-year to $0.25.

In terms of forward EV/S, IRWD’s 4.98x is 24.8% lower than the 6.62x industry average.  In terms of forward P/S also, the stock’s 4.95x is 38.1% lower than the 8.00x industry average. For the current quarter, ending June 30, 2021, analysts expect IRWD’s EPS and revenue to increase 37.5% and 4%, respectively, year-over-year to $0.22 and $92.97 million. It surpassed the consensus EPS estimates in each of the trailing four quarters.

On May 27, 2021, along with its partner AbbVie Inc. (ABBV), IRWD announced that they  had reached an agreement with Teva Pharmaceutical Industries Limited’s (TEVA) Teva Pharmaceuticals USA, Inc. to provide a license to TEVA’s drug application seeking approval to market a generic version of 72 mcg LINZESS. This is expected to help expand IRWD’s market reach. The stock has surged 29.9% over the past three months to close yesterday’s trading session at $11.99.

It’s no surprise that IRWD has an overall B rating, which equates to Buy in our POWR Ratings system. The stock has an A grade for Quality and Value, and a B grade for Growth. Click here to see the additional POWR Ratings for IRWD (Momentum, Sentiment and Stability).

IRWD is ranked #19 in the same industry.

Click here to checkout our Healthcare Sector Report for 2021

IPSEY shares were trading at $26.62 per share on Thursday morning, up $0.92 (+3.58%). Year-to-date, IPSEY has gained 31.07%, versus a 12.66% rise in the benchmark S&P 500 index during the same period.

About the Author: Ananyo Guha Niyogi

Ananyo’s ardent interest in capital markets, wealth management, and financial regulatory issues, led him to a career as an investment analyst. His goal is to educate individual investors by making complex financial issues easy to understand. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
IPSEYGet RatingGet RatingGet Rating
HLUYYGet RatingGet RatingGet Rating
IRWDGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com

Inflation Not Fading Fast Enough for Stock Investors

Investors may have celebrated the end of high inflation too soon. The CPI report shows inflation bouncing higher and thus pushing back the start date for Fed rate cuts. This has the S&P 500 (SPY) coming off recent highs. This begs questions like how much more downside could we see? And when will the bull market get back on track? 44 year investment veteran Steve Reitmeister shares his answers to these questions in this timely commentary including a preview of his top picks to stay ahead of the pack. Read on below for more...

3 Auto Stocks to Consider Over TSLA in April

Tesla (TSLA) reported a decline in deliveries in the first quarter, and Wall Street expects the company to deliver fewer vehicles than last year. Furthermore, rising competition, slowing EV sales, and stretched valuation make TSLA unattractive from an investment standpoint. Considering these factors, investors could consider buying fundamentally strong auto stocks Blue Bird (BLBD), Rolls-Royce Holdings (RYCEY), and Stellantis (STLA) over Tesla (TSLA). Read more...

3 Top-Rated Tech Stock Buys for Value in April

The technology sector is undergoing a notable surge, propelled by increasing digitalization endeavors among businesses and governmental support for technological progress. So, fundamentally sound tech stocks Box Inc. (BOX), Teradata (TDC), and Materialise (MTLS), which seem pretty undervalued, might be ideal buys this month. Continue reading...

Top Software Stocks at the Forefront of Market Gains

The software industry's prospects appear bright due to increasing investments in digital transformation, high demand for advanced software services from various sectors, and the integration of emerging technologies such as generative AI. Therefore, investors could consider buying quality software stocks Autodesk (ADSK), DocuSign (DOCU), and Pegasystems (PEGA) for solid gains. Read more...

Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

Read More Stories

More Ipsen S.A. (IPSEY) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All IPSEY News