In this article, we will take a look at the 12 best medical stocks to buy under $10. To skip our analysis of the latest trends, and market activity, you can go directly to see the 5 Best Medical Stocks to Buy Under $10.
The healthcare sector spans medical stocks including biotechnology companies, health insurance services providers, medical care facilities operators, drug manufacturers, and medical devices companies, among others. The sector includes companies with market capitalizations ranging from several million dollars to hundreds of billion dollars. The components of the sector include companies with varying market capitalization and these companies are at different stages of their business cycles.
For instance, healthcare industry bigwigs like Pfizer Inc. (NYSE:PFE), Eli Lilly and Company (NYSE:LLY), Johnson & Johnson (NYSE:JNJ), and Merck & Co., Inc. (NYSE:MRK) benefit from diversification as they operate across several market segments with plenty of products. On the other hand, there is a large number of medical companies that focus on specific medical areas such as biotechnology or medical devices, and typically specialize in a specific niche. An example would be UniQure N.V. (NASDAQ:QURE), a small-cap medical company focused on gene therapies for genetic diseases.
An important factor for small medical companies focused on niche areas is the M&A activity. These companies are picked by bigger players for attractive premiums once they make significant breakthroughs. The M&A activity in the biotech industry, a major industry in the healthcare sector, picked up pace once again in 2023 after a dismal performance in 2022. It has been a relatively strong year for the pharmaceutical and life sciences sectors with both deal value and volume of M&A close to pre-pandemic levels, according to PwC’s latest analysis. These sectors combined registered $222 billion worth of M&A deals during the twelve months ended November 16, 2023. You can read more about this in our recent article: 13 High Growth Healthcare Stocks to Buy
Similarly, macroeconomic conditions tend to have a greater impact on smaller companies that are at the early stages of their business cycle such as biotechnology or medical devices companies focused on developing novel therapeutics. Rising interest rates lead to lower than normal valuations for these companies due to two reasons: the ability to raise capital deteriorates and cost of capital increases which puts the operations of the company at jeopardy, and higher interest rates reduce the value of future payments as the discount rate is higher. Interest rate cuts expected in the recent future raise the chances for a potential resurgence for these stocks, although there can be no guarantees.
Our list of 12 best medical stocks to buy under $10 is heavily concentrated with biotechnology companies mainly working on the development of novel therapies to treat rare and debilitating diseases. Investing in these companies can be risky as the viability of the therapies these companies are developing is assessed through rigorous criteria at extensive costs. Our list includes several well-funded biotechnology companies with potentially groundbreaking therapies in clinical stage such as UniQure N.V. (NASDAQ:QURE), bluebird bio, Inc. (NASDAQ:BLUE), and Travere Therapeutics, Inc. (NASDAQ:TVTX), among others.
Best Medical Stocks to Buy Under $10
Closeup of a pharmacist hand holding medicine from the pharmaceutical company.
Methodology
We sifted through the companies listed on major U.S. stock exchanges and identified companies operating in the healthcare sector with share price of less than $10.0 as of February 21. Then we sourced the hedge fund sentiment for each stock from Insider Monkey’s database.
Finally, we ranked our picks in ascending order of the number of hedge funds that have positions in them to identify the top 12 best medical stocks to buy under $10. Data from around 900 elite hedge funds tracked by Insider Monkey in the fourth quarter of 2023 was used to identify the number of hedge funds that hold stakes in each firm. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
New York-based Nuvation Bio Inc. (NYSE:NUVB) is a biopharmaceutical company focused on developing differentiated and novel therapeutic candidates for the unmet need in oncology.
On January 8, Nuvation Bio Inc. (NYSE:NUVB) announced that the U.S. Food and Drug Administration (FDA) has cleared its investigational new drug (IND) application to evaluate NUV-1511, the first clinical candidate from the company’s novel drug-drug conjugate (DDC) platform. The company anticipates initiating a Phase 1/2 clinical study of NUV-1511 in H1 2024.
On November 22, HC Wainwright & Co. analyst Robert Burns reiterated a ‘Buy’ rating for Nuvation Bio Inc. (NYSE:NUVB) shares with an unchanged price target of $4.5 per share which represents a potential upside of 154.24% based on the share price on February 21.
Replimune Group, Inc. (NASDAQ:REPL) is a clinical stage biotechnology company focused on the development of a novel class of tumor-directed oncolytic immunotherapies derived from its RPx platform.
The lead product candidate of Replimune Group, Inc. (NASDAQ:REPL) is RP1 which is based on a proprietary new strain of herpes simplex virus engineered and genetically armed with a fusogenic protein.
On December 5, Replimune Group, Inc. (NASDAQ:REPL) announced results from the primary analysis of the CERPASS trial evaluating RP1 in combination with cemiplimab for the treatment of locally advanced or metastatic cutaneous squamous cell carcinoma. RP1 demonstrated clinically meaningful improvements in complete response rate and duration of response compared to cemiplimab in the CERPASS clinical trial but did not meet either of the two primary endpoints.
As of Q4 2023, Replimune Group, Inc. (NASDAQ:REPL) shares were owned by 27 of the 933 hedge funds tracked by Insider Monkey. Its lead hedge fund shareholder was Baker Bros. Advisors with ownership of 9.5 million shares valued at $80 million.
Ann Arbor, Michigan-based Esperion Therapeutics (NASDAQ:ESPR) is a pharmaceutical company that discovers, develops, and commercializes innovative medicines and combinations to lower cholesterol.
On January 23, Esperion Therapeutics (NASDAQ:ESPR) announced the closing of its previously announced underwritten public offering of 65.2 million of its common shares at a price of $1.50 per share to raise gross proceeds of nearly $98 million.
Esperion Therapeutics (NASDAQ:ESPR) intends to use the net proceeds from the public offering to fund the ongoing commercialization efforts for NEXLETOL (bempedoic acid) and NEXLIZET (bempedoic acid and ezetimibe), and for other corporate purposes.
Amsterdam, Netherlands-based UniQure N.V. (NASDAQ:QURE) is a biotechnology company focused on research and clinical development to advance proprietary gene therapies for the treatment of patients with Huntington's disease, refractory mesial temporal lobe epilepsy, ALS, Fabry disease, and other severe diseases.
On December 19, UniQure N.V. (NASDAQ:QURE) announced updated interim results on Phase I/II Clinical Trials of AMT-130 gene therapy for the treatment of Huntington’s Disease. Patients treated with the therapy “continue to show evidence of preserved neurological function with potential dose-dependent clinical benefits relative to an inclusion criteria-matched natural history of the disease.”
According to Insider Monkey data on 933 hedge funds, 28 hedge funds held shares of UniQure N.V. (NASDAQ:QURE), valued at $103 million, as of Q4 2023. The largest shareholder was Ryan Wilder’s Vestal Point Capital with ownership of 3.9 million shares valued at $27 million.
8. Pacific Biosciences of California (NASDAQ:PACB)
Share Price as of February 21: $5.05
Number of Hedge Fund Holders: 28
Menlo Park, California-based Pacific Biosciences of California (NASDAQ:PACB) is a biotechnology company offering advanced sequencing systems to provide a complete and accurate view of genomes, transcriptomes, and epigenomes.
On February 15, Pacific Biosciences of California (NASDAQ:PACB) released its financial results for Q4 2023. Its revenue increased by 113% y-o-y to $58 million while net loss declined by 3% y-o-y to $82 million.
Following the earnings release, UBS analyst John Sourbeer lowered the price target for Pacific Biosciences of California (NASDAQ:PACB) shares to $12 from $12.5 and maintained a ‘Buy’ rating for its shares. The target price represents a potential upside of 137.62% based on the share price on February 21.
Franklin, Tennessee-based Community Health Systems (NYSE:CYH) is a leading healthcare provider developing and operating healthcare delivery systems in 40 distinct markets across 15 states in the United States. It owns and leases 71 affiliated hospitals with approximately 12,000 beds and operates more than 1,000 sites of care.
The quarterly revenue of Community Health Systems (NYSE:CYH) increased by 1% on a y-o-y basis in Q4 2023. The company posted a revenue of $3.2 billion and a net income of $46 million, which translated to an EPS of $0.35, $0.45 more than the consensus estimates.
Earlier in December, Community Health Systems (NYSE:CYH) completed the sale of three Florida Hospitals to Tampa General Hospital for nearly $294 million in cash. Including these divestitures, the company divested eight hospitals and a majority interest in another hospital during 2023.
Gossamer Bio, Inc. (NASDAQ:GOSS) is a clinical-stage biopharmaceutical company focused on the development and commercialization of seralutinib for the treatment of pulmonary arterial hypertension.
On November 9, Gossamer Bio, Inc. (NASDAQ:GOSS) released its financial results and provided business update for Q3 2023. The phase 3 PROSERA site activations are proceeding ahead of schedule with first dosing expected in Q4 2023, according to the company. It had $329 million in cash, cash equivalents & marketable securities at the end of the quarter.
On December 19, Wedbush analyst Andreas Argyrides reiterated a ‘Buy’ rating for Gossamer Bio, Inc. (NASDAQ:GOSS) shares with an unchanged price target of $6 per share. The target price represents a potential upside of 395.87% based on the share price on February 21.
