10 Most Undervalued US Stocks to Buy According to Hedge Funds

6. Merck & Co Inc. (NYSE:MRK)

Forward P/E Ratio as of March 6: 10.34

Number of Hedge Fund Holders: 91

Merck & Co Inc. (NYSE:MRK) is a global healthcare leader that operates through its Pharmaceutical and Animal Health segments and delivers innovative therapies and solutions. These include oncology treatments, vaccines, and veterinary products, which are driven by established brands and strategic collaborations.

The company’s oncology segment, which is led by KEYTRUDA, is a primary revenue source. In Q4 2024, KEYTRUDA sales surged 21% to $7.8 billion, driven by global demand in both metastatic and earlier-stage cancers. US growth spanned various tumor types, with increased adoption in combinations for urothelial and endometrial cancers, and as a standalone for lung and breast cancers. International growth mirrored this trend, particularly in early-stage breast cancer. Regulatory approvals for KEYTRUDA-based regimens were secured in China, Japan, and the US.

At upcoming medical meetings, the company will present detailed findings from oncology studies, which include subcutaneous pembrolizumab and KEYTRUDA in head and neck cancer. It’s also progressing sac-TMT through multiple Phase 3 trials. Sac-TMT is an investigational antibody-drug conjugate (ADC) being developed by Merck & Co Inc. (NYSE:MRK) in collaboration with Kelun-Biotech.

GreensKeeper Asset Management stated the following regarding Merck & Co Inc. (NYSE:MRK) in its Q3 2024 investor letter:

“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”