4 Healthcare Names Offering Value After Good News
Where I am finding value in the healthcare space.
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The market is starting to feel a bit tired in trading sessions this week. That said, investors continue to give the presidential administration the benefit of doubt around its constantly shifting tariff policies.
Value in this overbought market also feels harder to find than a couple of seats at a good restaurant on Atlantic Avenue here in Delray Beach, Florida on a Saturday night. I am, however, still finding some bargains in the healthcare arena which has badly lagged the overall market in recent years. In today’s column, I explored some undervalued names that have seen positive news this week.
Let’s start with Collegium Pharmaceuticals COLL, a biopharma name with just a tad over a $1 billion market capitalization. The stock is cheap with a PE ratio in the mid-single digits. Management bought back some $60 million of its stock in 2024. A good use of cash at these valuations. Earlier this week, management authorized a new $150 million stock buyback authorization it intends to execute against by the end of 2026. This program will remove nearly 15% of the outstanding trading levels and should be a powerful tailwind for EPS.
Moving on to Humacyte, Inc. HUMA: This universally implantable regenerative human tissue concern has been a laggard in my portfolio for some time now. However, the shares have shown considerable signs of life over the past two months, more than doubling over that time. The recent commercial launch of vascular trauma product Symvess seems to be gaining a bit of traction. On Tuesday, the U.S. Defense Logistics Agency issued an Electronic Catalog (ECAT) listing approval for Symvess. This will make it available to Department of Defense and U.S. Department of Veterans Affairs facilities. The stock rose some 18% on the news on Tuesday and the stock appears to have the "Big Mo" right now.
Next up is Progyny, Inc PGNY, the subject of a covered call trade idea of mine back in January 2025. This pharmaceutical benefits firm is focused largely on the fertility cycle and fills a coverage gap in medical insurance. Progyny collects a per-employee, per--month fee from employers. The company raised its guidance with its first quarter results earlier this year. On Tuesday, management came out with a statement saying Q2 numbers will now exceed that previous guidance. The stock sprinted forward 13% in trading on Tuesday on the news. The shares are still reasonably priced at just under 15-times trailing earnings.
Finally, I am watching Viking Therapeutics VKTX whose stock closed above the $30.00 level for the first time since mid-March on Tuesday. The company just initiated a Phase 3 study for its lead drug candidate late last month and some key trial data from the oral form of that GLP-1 asset should be released on the near-term horizon. Buyout speculation also seems to be picking up a tad. I will be watching to see if this is a potential breakout or just a head fake in coming trading sessions.
And those are some healthcare names moving nicely ahead within a market that continues to be overbought.
At the time of publication, Jensen was long COLL, HUMA, PGNY and VKTX.
