5 Most Undervalued Biotech Stocks To Buy According To Hedge Funds

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1. Roivant Sciences Ltd. (NASDAQ:ROIV)

Number of Hedge Fund Holders: 55

PE Ratio as of February 29: 2.22

Roivant Sciences Ltd. (NASDAQ:ROIV) ranks 1st on our list of the most undervalued biotech stocks. It is a commercial-stage biopharmaceutical company specializing in the development and commercialization of medicines for inflammation and immunology. On February 13, Roivant Sciences Ltd. (NASDAQ:ROIV) reported its financial results for the third quarter ended December 31, 2023. The company posted a Q3 GAAP EPS of $6.03 and a revenue of $37.14 million, beating market estimates by $7.32 million. Revenue for the quarter rose 117.8% on a year-over-year basis. 

According to Insider Monkey’s fourth quarter database, 55 hedge funds were bullish on Roivant Sciences Ltd. (NASDAQ:ROIV), compared to 44 funds in the earlier quarter. Daniel Gold’s QVT Financial is the biggest stakeholder of the company, with 112.5 million shares worth $1.26 billion. 

Tourlite Capital Management made the following regarding Roivant Sciences Ltd. (NASDAQ:ROIV) in its fourth quarter 2023 investor letter:

“During the fourth quarter, the fund initiated a significant position in Roivant Sciences Ltd. (NASDAQ:ROIV), a biotech company specializing in consolidating promising drug patents, known as ‘vants’. Our thesis is based on the following framework:

Cash value: ROIV’s strategic acquisition of Televant (85% ownership) from Pfizer for $45 million in December 2022, followed by the sale of this asset to Roche for $5.2 billion in Q4 2024, showcases management’s ability for value creation Adjusting for the sale proceeds, Roivant has a net cash position of ~$8 per share…” (Click here to read the full text)

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