In this piece, we will take a look at the ten best medical stocks under $5. If you want to jump ahead to the top five stocks in this list, then head on over to 5 Best Medical Stocks Under $5.
The medical industry is one of the most lucrative sectors globally, and it is one that sees the highest spending in terms of research and development, and breakthrough advances through keeping up the pace with technology. The technologies used to research and develop new medicines today would very well be thought of as magic just a century ago, and the biotechnology sector in particular proved crucial in the world’s fight against the devastating coronavirus through the use of novel mRNA technologies that target the body’s very genetic structure.
As such, market research firms are full of optimism for the medical and healthcare stocks. A research report from Research and Markets suggests that the global healthcare market was worth a whopping $8.4 trillion in 2018 after it grew at a compounded annual growth rate (CAGR) of 7.3% since 2014. From then until the end of this year, the growth accelerated to 8.9%, and the industry will be worth a staggering $11 trillion by the end of this year, believes the research firm. Driving this growth will be factors such as an aging population, technological advancements, and a sedentary lifestyle. Delving deeper inside the industry, the firm outlines that biologics will have the strongest growth rate of 13.6%.
Another report, this time from Insider Intelligence, estimates that healthcare spending accounted for a massive 19.7% of the U.S. gross domestic product (GDP) in 2020. National healthcare expenditure, which sat at $4.1 trillion in 2020, will grow to $6.2 trillion by 2028 according to Centers for Medicare and Medicaid.
A research article published in Health Affairs estimates that national health expenditures will grow by 5.4% between 2018 to 2028, and continue to account for 19.7% of GDP spending by 2028 end. It attributes the growth to the rise in medicine prices and more people signing up for Medicare.
Finally, Policy Advice takes a look at different segments of the healthcare industry to provide a holistic look. For instance, it estimates that an average healthcare employee earns almost $61,000 a year, which is significantly higher than the national average of $47,060. It also outlines that the U.S. healthcare industry is the largest in the world, and it consists of 784,626 companies, with patient care accounting for $1 trillion or 64% of the overall revenue. Looking at the future, the research firm shares that technology is king, with 94% of U.S. hospitals on the road to digitization to avoid doctors having to fill out paperwork, and the Internet of Things (IoT) set to take over hospitals by allowing for improved training, workflow management, and patient monitoring.
Therefore, the healthcare industry clearly has a bright future ahead of it. Out of the hundreds of thousands of companies in it, we have narrowed down a handful of players with low stock prices. The top firms on our list are Verastem, Inc. (NASDAQ:VSTM), Karyopharm Therapeutics Inc. (NASDAQ:KPTI), and CTI BioPharma Corp. (NASDAQ:CTIC).
Photo by National Cancer Institute on Unsplash
Our Methodology
We took a broad look at the healthcare industry to pick out which companies have promising technologies and a low share price. These were then evaluated through their product strength, financial performance, and outlook. After this, the companies were ranked through Insider Monkey’s Q2 2022 survey of 895 hedge funds. All these stocks are priced under $5 as of October 21.
Best Medical Stocks Under $5
10. T2 Biosystems, Inc. (NASDAQ:TTOO)
Number of Hedge Fund Holders: 3
T2 Biosystems, Inc. (NASDAQ:TTOO) is a diagnostics product manufacturer based in the U.S. The firm makes and sells devices that diagnose pathogens, infections, genes, and skin diseases. It is headquartered in Lexington, Massachusetts.
T2 Biosystems, Inc. (NASDAQ:TTOO) scored a big win in October 2022 when it announced that its products are capable of rapidly detecting sepsis – which is a life threatening medical emergency that is caused by an overreaction by the body’s immune system. The firm is also aiming to finish the commercialization of a new system that detects Lyme disease in 2023.
T2 Biosystems, Inc. (NASDAQ:TTOO)’s fiscal year 2021 saw the firm grow its revenue by 55% annually to $28.1 million. Its Sepsis diagnostic machines are operating in a market that sees U.S. hospitals spend $62 billion annually in healthcare costs. By the end of this year’s second quarter, three of the 895 hedge funds polled by Insider Monkey had invested in the firm.
Out of these, Israel Englander’s Millennium Management is T2 Biosystems, Inc. (NASDAQ:TTOO)’s largest investor. It owns 453,687 shares that are worth $73,000.
Along with Karyopharm Therapeutics Inc. (NASDAQ:KPTI), Verastem, Inc. (NASDAQ:VSTM), and CTI BioPharma Corp. (NASDAQ:CTIC), T2 Biosystems, Inc. (NASDAQ:TTOO) is hot medical stock under $5.
9. Zomedica Corp. (NYSE:ZOM)
Number of Hedge Fund Holders: 5
Zomedica Corp. (NYSE:ZOM) is an animal health firm that develops and sells products that allow for the diagnosis of different diseases in dogs and cats and treating horse and small animal injuries such as broken bones and torn ligaments. The firm is based out of Ann Arbor, Michigan, the United States.
Zomedica Corp. (NYSE:ZOM) posted a 51% revenue growth during its second fiscal quarter as the firm brought in $4.2 million through sales. This growth was fueled by the firm’s TRUFORMA diagnostics platform, which brought it $92,000 in sales for a 486% annual increase.
Zomedica Corp. (NYSE:ZOM) is also rapidly diversifying its operations, and it has already acquired two firms this year. The firm’s PulseVet platform was also named the National Cutting Horse Association’s official shock wave therapy platform to stimulate healing in October 2022. Insider Monkey’s Q2 2022 survey of 895 hedge funds outlined that five had invested in Zomedica Corp. (NYSE:ZOM).
8. HOOKIPA Pharma Inc. (NASDAQ:HOOK)
Number of Hedge Fund Holders: 9
HOOKIPA Pharma Inc. (NASDAQ:HOOK) is a bio-pharmaceutical company that develops drugs for kidney patients, prostate cancer, lung cancer, and pancreatic cancer. It is headquartered in New York, New York, the United States.
HOOKIPA Pharma Inc. (NASDAQ:HOOK) partnered up with a large healthcare company earlier this year to provide its arena-virus platform for treating HIV patients. This marked a big win for the firm as the global HIV market is estimated to reach $36 billion in 2027, and provide the firm with huge revenue potential. The firm also signed a deal with the pharma giant Roche in October 2022, through which it will develop a therapy for mutated cancers. This agreement sees HOOKIPA Pharma Inc. (NASDAQ:HOOK) benefit from potentially $1 billion in royalties and net sales.
By the end of this year’s June quarter, nine out of the 895 hedge funds polled by Insider Monkey had bought a stake in HOOKIPA Pharma Inc. (NASDAQ:HOOK).
Out of these, David Kroin’s Deep Track Capital is HOOKIPA Pharma Inc. (NASDAQ:HOOK)’s largest investor. It owns 5 million shares that are worth $8.2 million.
7. Xeris Biopharma Holdings, Inc. (NASDAQ:XERS)
Number of Hedge Fund Holders: 11
Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) is an American healthcare company that develops therapies for paralysis, excess cortisol levels, hypoglycemia, and Cushing’s syndrome. The firm is based in Chicago, Illinois.
Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) grew its revenue by 170% during its first fiscal quarter to bring in $22 million in net sales. This was fueled by its Gvoke glucagon drug growing its prescriptions by 88% annually and managing to capture 22% of the market with total patients growing annually by 12%.
Xeris Biopharma Holdings, Inc. (NASDAQ:XERS) then maintained its strong growth trajectory in the second fiscal quarter, when its 189% revenue growth solidified the upward momentum. During this time period, Gvoke’s prescriptions and net revenue also grew, despite a price cut. Insider Monkey’s June quarter of 2022 survey covering 895 hedge funds revealed that 11 had invested in the firm. Jefferies set a $4 share price target for the company in October 2022 alongside a Buy rating on the shares.
Xeris Biopharma Holdings, Inc. (NASDAQ:XERS)’s largest investor is Timothy P. Lynch’s Stonepine Capital which owns 11 million shares that are worth $17 million.
6. Agenus Inc. (NASDAQ:AGEN)
Number of Hedge Fund Holders: 11
Agenus Inc. (NASDAQ:AGEN) is a biotechnology firm that researches and develops treatments for cancer and immune system disorders. These include cervical cancer, solid tumors, myeloma, and other liver problems. The company also has agreements with large companies such as Gilead, and it is headquartered in Lexington, Massachusetts.
Agenus Inc. (NASDAQ:AGEN)’s partnership with GSK, through which the firm develops respiratory tract disease treatment for older results, yielded fruitful results in October 2022 when the latter announced that the treatment had achieved a vaccine efficacy of 83%.
Agenus Inc. (NASDAQ:AGEN) also has a strong pipeline of drugs, which includes a colorectal cancer treatment that has already shown positive results in patients that had failed to respond to several types of therapies before. This drug, called Botensilimab, reduces genetic polymorphism by a strong 40% in target cancers, through which it outpaces its next closest rival Yervoy, which has failed to show any results. Nikko set an Outperform share rating and a $5 price target for the company in October 2022.
Insider Monkey’s Q2 2022 research covering 895 hedge funds revealed that 11 had held a stake in Agenus Inc. (NASDAQ:AGEN).
Out of these, Agenus Inc. (NASDAQ:AGEN)’s largest investor is David Kroin’s Deep Track Capital which owns 22 million shares that are worth $43 million.
Agenus Inc. (NASDAQ:AGEN) joins Verastem, Inc. (NASDAQ:VSTM), Karyopharm Therapeutics Inc. (NASDAQ:KPTI), and CTI BioPharma Corp. (NASDAQ:CTIC) in our list of top cheap medical stocks.
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Disclosure: None. 10 Best Medical Stocks Under $5 is originally published on Insider Monkey.
