5 Cheap Pharmaceutical Stocks to Watch

1. Viatris Inc. (NASDAQ:VTRS)

Number of Hedge Fund Holders: 53
Stock Price as of September 22: $13.28

Viatris Inc. (NASDAQ:VTRS) tops our list of the cheap pharmaceutical stocks to watch. It is a global pharmaceutical company that provides access to medicines, sustainable operations, and develops innovative solutions to improve patients’ health.

In Q2 2021, Viatris Inc. (NASDAQ:VTRS) posted an EPS of $0.98, beating the estimates by $0.10. The company’s revenue for the quarter stood at $4.58 billion, up 67.8% from the prior-year quarter. Viatris Inc. (NASDAQ:VTRS) raised its FY21 revenue guidance and expects revenue in the range of $17.5 billion and $17.9 billion, versus the estimates of $17.6 billion. This May, Royal Bank of Canada initiated its coverage on Viatris Inc. (NASDAQ:VTRS) with an ‘Outperform’ rating and a $24 price target.

In Q2 2021, 53 hedge funds tracked by Insider Monkey have positions in Viatris Inc. (NASDAQ:VTRS), compared with 58 in the previous quarter. The total value of these stakes is over $1.5 billion. With over 1.5 million shares, worth $22.7 billion, Crake Asset Management is the company’s leading shareholder.

Mittleman Brothers mentioned Viatris Inc. (NASDAQ:VTRS) in its first-quarter 2021 investor letter. Here is what the firm has to say:

“Our other new position in Q1 (in addition to AMA Group) is Viatris (VTRS), which is the old stock of the generic drug manufacturer Mylan Labs after it merged with Pfizers’s Upjohn unit late last year, via a tax-efficient Reverse Morris Trust. VTRS’s current market capitalization of ~$17B is less than 6x its estimated FCF of $3B (before restructuring costs) estimated for 2022, and the current enterprise value of $40B is only 6.4x EBITDA of $6.25B. Consider that Mylan Labs stock (MYL, predecessor to VTRS) was nearly $67/share on a $40B buy-out offer from Teva in 2015. Mylan rejected that seemingly very reasonable bid. In merging with Pfizer’s spin-off of Upjohn, Viatris became an equal (in sales, about $17B for each company) to the largest player in generic pharmaceuticals globally, Teva, Mylan’s former suitor. Viatris is an orphan, but its pedigree is tarnished (the reputation of Mylan’s management in rejecting the Teva bid, and other mistakes, still lingers), even though the new CEO and CFO come from Pfizer, the Chairman and President from Mylan remain. Also, ETFs that owned Pfizer had to sell the VTRS shares that they received, which added considerable forced selling.”

You can also take a look at Top Pharmaceutical Companies in India and 10 Best Pharmaceutical Stocks to Buy According to Cathie Wood

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