The pharmaceutical sector received much investor attention amid the COVID-19 pandemic and their interest in this sector is expected to continue given the growing demand for pharmaceutical products and solutions. As such, we think it could be smart to bet on relatively undervalued pharma stocks Ipsen (IPSEY), H. Lundbeck (HLUYY), and Ironwood (IRWD). They are well positioned to capitalize on the industry tailwinds.The pharmaceutical industry has been the beneficiary of significant investor attention amid the COVID-19 pandemic as society turned to its products to fight the coronavirus. Investors’ interest in pharmaceutical stocks is evident in Invesco Dynamic Pharmaceuticals ETF’s (PJP) 24.4% gains over the past year. However, many investors have rotated out of expensive growth stocks from the pharma space over the past few months to capitalize on the economic recovery by betting on the cyclical stocks.
This has created an opportunity to buy fundamentally strong pharmaceutical stocks at cheaper prices. With many patients rescheduling their postponed visits to the hospitals, and pharma companies increasing their spending on research and development to find treatments for other critical diseases, the industry is expected to continue growing. According to Globe Newswire, the pharmaceutical market’s value is expected to reach $2,151.1 billion by 2027.
So, we think it is wise to bet now on companies such as Ipsen S.A. (IPSEY), H. Lundbeck A/S (HLUYY), and Ironwood Pharmaceuticals, Inc. (IRWD) because they currently look significantly undervalued.