5 Most Undervalued Pharma Stocks To Buy According To Hedge Funds

4. Organon & Co. (NYSE:OGN)

Number of Hedge Fund Holders: 38

P/E Ratio as of January 23: 7.91

Organon & Co. (NYSE:OGN) is a New Jersey-based health care company that develops health solutions through a portfolio of prescription medicines and therapies in the United States and internationally. On November 14, Organon & Co. (NYSE:OGN)’s Ontruzant, a biosimilar of Roche’s cancer drug Herceptin, to treat adults with early breast cancer, metastatic breast cancer, and metastatic gastric cancer, became available in Canada. It is one of the most undervalued pharma stocks to invest in according to smart investors. 

On January 5, Organon & Co. (NYSE:OGN) announced a strategic investment in Claria Medical, a private company developing an investigational medical device being studied for use during minimally invasive laparoscopic hysterectomy. The agreement also allows Organon & Co. (NYSE:OGN) the option to acquire Claria Medical.

According to Insider Monkey’s data, Organon & Co. (NYSE:OGN) was part of 38 hedge fund portfolios at the end of September 2022, up from 28 in the earlier quarter. Steven Boyd’s Armistice Capital is the largest stakeholder of the company, with 1.70 million shares worth $39.5 million. 

Miller Value Partners made the following comment about Organon & Co. (NYSE:OGN) in its Q3 2022 investor letter:

“Organon & Co. (NYSE:OGN) was the top detractor for the quarter, falling 30.0%2. Organon reported 2Q22 revenue of $1.59 billion, -0.6% Y/Y, ahead of consensus of $1.54 billion, and Adjusted EPS of $1.25, -27.3% Y/Y, in-line with analyst expectations. Adjusted EBITDA for the quarter came in at $512 million (32.3% margin), compared to 2Q21 Adjusted EBITDA of $627 million (39.3% margin). Management revised FY22 guidance for revenue of $6.1-6.3 billion, compared to previous guidance for revenue of $6.1-6.4 billion, to reflect persisting foreign exchange (FX) headwinds, and Adjusted EBITDA margin of 32-34%, compared to prior guidance for a margin of 34-36%, which incorporates ~$110 million of in-process research and development (IPR&D) and milestone expenses from business development. Management’s guidance implies FY22 Adjusted EBITDA of $2.05B, at the respective midpoints, or an Enterprise Value (EV)/EBITDA multiple of ~7.0x.”