Validea’s Top Five Healthcare Stocks Based On Joseph Piotroski – 4/18/2021
8 min readThe following are the top rated Healthcare stocks according to Validea’s Book/Market Investor model based on the published strategy of Joseph Piotroski. This value-quant strategy screens for high book-to-market stocks, and then separates out financially sound firms by looking at a host of improving financial criteria.
TEVA PHARMACEUTICAL INDUSTRIES LTD (ADR) (TEVA) is a large-cap growth stock in the Biotechnology & Drugs industry. The rating according to our strategy based on Joseph Piotroski is 60{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or above typically indicates that the strategy has some interest in the stock and a score above 90{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} typically indicates strong interest.
Company Description: Teva Pharmaceutical Industries Ltd is a Israeli-based pharmaceutical company. The Company operates through three segments: North America, Europe and International Markets. Each business segment manages entire product portfolio in its region, including generics, specialty and over-the-counter (OTC) products. In addition to these three segments, The Company has other activities, primarily the sale of active pharmaceutical ingredients (API) to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through its affiliate Medis.
The following table summarizes whether the stock meets each of this strategy’s tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy’s criteria.
| BOOK/MARKET RATIO: | PASS |
| RETURN ON ASSETS: | FAIL |
| CHANGE IN RETURN ON ASSETS: | FAIL |
| CASH FLOW FROM OPERATIONS: | PASS |
| CASH COMPARED TO NET INCOME: | PASS |
| CHANGE IN LONG TERM DEBT/ASSETS | FAIL |
| CHANGE IN CURRENT RATIO: | PASS |
| CHANGE IN SHARES OUTSTANDING: | FAIL |
| CHANGE IN GROSS MARGIN: | PASS |
| CHANGE IN ASSET TURNOVER: | PASS |
Detailed Analysis of TEVA PHARMACEUTICAL INDUSTRIES LTD (ADR)
VOYAGER THERAPEUTICS INC (VYGR) is a small-cap value stock in the Biotechnology & Drugs industry. The rating according to our strategy based on Joseph Piotroski is 60{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or above typically indicates that the strategy has some interest in the stock and a score above 90{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} typically indicates strong interest.
Company Description: Voyager Therapeutics, Inc. is a clinical-stage gene therapy company. The Company focuses on developing treatments for patients suffering from severe diseases of the central nervous system (CNS). The Company’s pipeline consists of programs for CNS indications, including advanced Parkinson’s disease; a monogenic form of amyotrophic lateral sclerosis (ALS); Huntington’s disease; Friedreich’s ataxia; frontotemporal dementia/Alzheimer’s disease, and severe chronic pain. The Company’s clinical candidate, VY-AADC01, is an adeno-associated virus (AAV) gene therapy product candidate, for the treatment of advanced Parkinson’s disease. VY-AADC01 consists of the AAV2 capsid, which has been used in multiple AAV gene therapy clinical trials for various diseases, and the cytomegalovirus promoter that drives expression of the aromatic L-amino acid decarboxylase (AADC) transgene. Its pipeline also includes VY-SOD101, VY-FXN01, VY-HTT01, VY-TAU01 and VY-NAV01.
The following table summarizes whether the stock meets each of this strategy’s tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy’s criteria.
| BOOK/MARKET RATIO: | PASS |
| RETURN ON ASSETS: | PASS |
| CHANGE IN RETURN ON ASSETS: | PASS |
| CASH FLOW FROM OPERATIONS: | FAIL |
| CASH COMPARED TO NET INCOME: | FAIL |
| CHANGE IN LONG TERM DEBT/ASSETS | PASS |
| CHANGE IN CURRENT RATIO: | PASS |
| CHANGE IN SHARES OUTSTANDING: | FAIL |
| CHANGE IN GROSS MARGIN: | FAIL |
| CHANGE IN ASSET TURNOVER: | PASS |
Detailed Analysis of VOYAGER THERAPEUTICS INC
INVACARE CORPORATION (IVC) is a small-cap value stock in the Medical Equipment & Supplies industry. The rating according to our strategy based on Joseph Piotroski is 50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or above typically indicates that the strategy has some interest in the stock and a score above 90{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} typically indicates strong interest.
Company Description: Invacare Corporation is a manufacturer and distributor for medical equipment used in non-acute care settings. The Company’s geographical segments are Europe; North America, which includes North America/Home Medical Equipment (North America/HME) and Institutional Products Group (IPG) segments, and Asia/Pacific. The Company manufactures and distributes three product categories: mobility and seating, lifestyle and respiratory therapy. It provides medical device solutions for congenital (cerebral palsy, muscular dystrophy and spina bifida), acquired (stroke, spinal cord injury, traumatic brain injury, post-acute recovery and pressure ulcers) and degenerative (amyotrophic lateral sclerosis, multiple sclerosis, chronic obstructive pulmonary disease (COPD), elderly and bariatric) ailments. The Company sells its products to home medical equipment providers with retail and e-commerce channels, residential living operators, distributors and government health services.
The following table summarizes whether the stock meets each of this strategy’s tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy’s criteria.
| BOOK/MARKET RATIO: | PASS |
| RETURN ON ASSETS: | FAIL |
| CHANGE IN RETURN ON ASSETS: | PASS |
| CASH FLOW FROM OPERATIONS: | PASS |
| CASH COMPARED TO NET INCOME: | PASS |
| CHANGE IN LONG TERM DEBT/ASSETS | FAIL |
| CHANGE IN CURRENT RATIO: | FAIL |
| CHANGE IN SHARES OUTSTANDING: | FAIL |
| CHANGE IN GROSS MARGIN: | PASS |
| CHANGE IN ASSET TURNOVER: | FAIL |
Detailed Analysis of INVACARE CORPORATION
NEXTCURE INC (NXTC) is a small-cap value stock in the Biotechnology & Drugs industry. The rating according to our strategy based on Joseph Piotroski is 50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or above typically indicates that the strategy has some interest in the stock and a score above 90{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} typically indicates strong interest.
Company Description: Nextcure Inc. is a clinical-stage biopharmaceutical company, which is focused on discovering and developing immunomedicines to treat cancer and other immune-related diseases. The Company uses its functional integrated nextcure discovery in immune oncology (FIND-IO) technology to functional screening approaches for the identification of targets from multiple therapeutic areas, including autoimmunity and neurology, enabling immunomedicine to treat unmet medical needs. Its product pipelines include NC318, a immunotherapeutic against a immunomodulatory target found on a restricted set of myeloid and tumor cells, and NC410, a immunomedicine designed to block an immune regulator expressed on T cells and suppressive antigen-presenting cell populations, including dendritic cell subpopulations.
The following table summarizes whether the stock meets each of this strategy’s tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy’s criteria.
| BOOK/MARKET RATIO: | PASS |
| RETURN ON ASSETS: | FAIL |
| CHANGE IN RETURN ON ASSETS: | PASS |
| CASH FLOW FROM OPERATIONS: | FAIL |
| CASH COMPARED TO NET INCOME: | FAIL |
| CHANGE IN LONG TERM DEBT/ASSETS | PASS |
| CHANGE IN CURRENT RATIO: | PASS |
| CHANGE IN SHARES OUTSTANDING: | FAIL |
| CHANGE IN GROSS MARGIN: | FAIL |
| CHANGE IN ASSET TURNOVER: | PASS |
Detailed Analysis of NEXTCURE INC
VIATRIS INC (VTRS) is a large-cap value stock in the Biotechnology & Drugs industry. The rating according to our strategy based on Joseph Piotroski is 50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or above typically indicates that the strategy has some interest in the stock and a score above 90{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} typically indicates strong interest.
Company Description: Viatris Inc., formerly Upjohn Inc., is a healthcare company. It is a scientific, manufacturing and distribution company that is specialized in delivering medicines to patients in over 165 countries and territories. It provides access to medicines, advance sustainable operations, develop solutions and leverage it’s specializatiin to connect people to products and services through it’s Global Healthcare Gateway. It’s portfolio comprises of more than 1,400 molecules across a wide range of therapeutic areas, spanning both non-communicable and infectious diseases, global brands, complex generic and branded medicines, portfolio of biosimilars and a variety of over-the-counter consumer products. It produces medicines for patients across a broad range of therapeutic areas, spanning both noncommunicable and infectious diseases, which include cardiovascular, oncology, immunology, women’s healthcare, diabetes and metabolism, gastroenterology, respiratory and allergy and dermatology.
The following table summarizes whether the stock meets each of this strategy’s tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy’s criteria.
| BOOK/MARKET RATIO: | PASS |
| RETURN ON ASSETS: | FAIL |
| CHANGE IN RETURN ON ASSETS: | FAIL |
| CASH FLOW FROM OPERATIONS: | PASS |
| CASH COMPARED TO NET INCOME: | PASS |
| CHANGE IN LONG TERM DEBT/ASSETS | PASS |
| CHANGE IN CURRENT RATIO: | PASS |
| CHANGE IN SHARES OUTSTANDING: | FAIL |
| CHANGE IN GROSS MARGIN: | FAIL |
| CHANGE IN ASSET TURNOVER: | FAIL |
Detailed Analysis of VIATRIS INC
More details on Validea’s Joseph Piotroski strategy
About Joseph Piotroski: Piotroski isn’t your typical Wall Street big shot. In fact, he’s not even a professional investor. He’s a good old numbers-crunching accountant and college professor. But in 2000, shortly after he started teaching at the University of Chicago’s Graduate School of Business, Piotroski published a groundbreaking paper in the Journal of Accounting Research entitled “Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers”. In it, Piotroski laid out an accounting-based stock-selection/shorting method that produced a 23 percent average annual back-tested return from 1976 through 1996 — more than double the S&P 500’s gain during that time. Piotroski’s findings were reported in major financial publiations like SmartMoney. Today, he teaches accounting at Stanford University’s Graduate School of Business.
About Validea: Validea is an investment research service that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
