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Looking for undervalued stocks? Value investors look for opportunities to buy stocks that are trading at significant discounts to their fair value, with the assumption that they’ll move up to their fair value in the near future. One proxy for fair value is analyst target price.

We ran a screen on the healthcare sector for stocks trading at steep discounts to their analyst target prices, which may indicate that they are undervalued.

But because target prices are notoriously inflated, we only used the most pessimistic (the lowest) target prices, and for stocks with sufficient analyst coverage we only screened for stocks with 5 or more analyst ratings.‪

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.


(Click to enlarge)

Do you think these stocks will rise to their target prices? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by target price.

1. Isis Pharmaceuticals, Inc. (NASDAQ:ISIS): Engages in the discovery and development of antisense drugs using antisense drug discovery platform. Market cap of $655.23M. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $9.00. This implies a current upside of 34.73% from current levels around $6.68. The stock is a short squeeze candidate, with a short float at 10.42% (equivalent to 13.79 days of average volume). It's been a rough couple of days for the stock, losing 5.06% over the last week.

2. ZIOPHARM Oncology, Inc. (NASDAQ:ZIOP): Focuses on the development and commercialization of in-licensed cancer drugs in North America. Market cap of $295.02M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $6.00. This implies a current upside of 33.63% from current levels around $4.49. The stock is a short squeeze candidate, with a short float at 13.39% (equivalent to 15.5 days of average volume). It's been a rough couple of days for the stock, losing 9.83% over the last week.

3. GTX Inc. (NASDAQ:GTXI): Engages in the discovery, development, and commercialization of small molecules to treat cancer, osteoporosis and bone loss, muscle loss, and other serious medical conditions. Market cap of $182.72M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $4.00. This implies a current upside of 33.33% from current levels around $3.00. The stock is a short squeeze candidate, with a short float at 14.47% (equivalent to 17.37 days of average volume). It's been a rough couple of days for the stock, losing 16.62% over the last week.

4. Codexis, Inc. (NASDAQ:CDXS): Develops proprietary biocatalysts for pharmaceuticals and biofuels markets. Market cap of $166.47M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $6.00. This implies a current upside of 33.04% from current levels around $4.51. The stock is a short squeeze candidate, with a short float at 7.71% (equivalent to 10.04 days of average volume). It's been a rough couple of days for the stock, losing 6.02% over the last week.

5. Hanger Orthopedic Group Inc. (NYSE:HGR): Engages in the ownership and operation of orthotic and prosthetic (O&P) patient-care centers in the United States. Market cap of $530.48M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $22.00. This implies a current upside of 32.85% from current levels around $16.56. The stock is a short squeeze candidate, with a short float at 5.22% (equivalent to 5.97 days of average volume). It's been a rough couple of days for the stock, losing 6.86% over the last week.

6. MAP Pharmaceuticals, Inc. (NASDAQ:MAPP): Focuses on the development and commercialization of inhalation therapies for patients suffering from migraine. Market cap of $396.50M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $18.00. This implies a current upside of 32.55% from current levels around $13.58. This is a risky stock that is significantly more volatile than the overall market (beta = 2.8). The stock is a short squeeze candidate, with a short float at 6.24% (equivalent to 15.22 days of average volume). It's been a rough couple of days for the stock, losing 6.81% over the last week.

7. XOMA Ltd. (NASDAQ:XOMA): Engages in the discovery, development, and manufacture of therapeutic antibodies to treat inflammatory, autoimmune, infectious, and oncological diseases. Market cap of $50.35M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $2.00. This implies a current upside of 31.58% from current levels around $1.52. It's been a rough couple of days for the stock, losing 9.82% over the last week.

8. HEALTHSOUTH Corp. (NYSE:HLS): Offers inpatient rehabilitative healthcare services in the United States and Puerto Rico. Market cap of $1.62B. Of the 16 analysts that have set a target price on the stock, the lowest price target stands at $22.00. This implies a current upside of 30.95% from current levels around $16.80. The stock is a short squeeze candidate, with a short float at 8.1% (equivalent to 5.3 days of average volume). It's been a rough couple of days for the stock, losing 9.84% over the last week.

9. Echo Therapeutics, Inc. (NASDAQ:ECTE): Operates as a medical device and specialty pharmaceutical company in the United States. Market cap of $80.78M. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $3.00. This implies a current upside of 28.21% from current levels around $2.34. The stock is currently stuck in a downtrend, trading 11.27% below its SMA20, 20.79% below its SMA50, and 35.23% below its SMA200. The stock has performed poorly over the last month, losing 20.89%.

10. Sirona Dental Systems Inc. (NASDAQ:SIRO): Develops, manufactures, and markets dental equipment for dentists worldwide. Market cap of $2.23B. Of the 15 analysts that have set a target price on the stock, the lowest price target stands at $52.00. This implies a current upside of 27.48% from current levels around $40.79. The stock is currently stuck in a downtrend, trading 12.88% below its SMA20, 10.11% below its SMA50, and 19.14% below its SMA200. It's been a rough couple of days for the stock, losing 8.33% over the last week.

11. Orthofix International N.V. (NASDAQ:OFIX): Designs, develops, manufactures, markets, and distributes medical equipment used principally by musculoskeletal medical specialists for orthopedic applications. Market cap of $598.33M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $41.00. This implies a current upside of 25.84% from current levels around $32.58. It's been a rough couple of days for the stock, losing 5.5% over the last week.

12. Alphatec Holdings, Inc. (NASDAQ:ATEC): Engages in the design, development, manufacture, and marketing of products for the surgical treatment of spine disorders, primarily focused on the aging spine. Market cap of $170.47M. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $2.50. This implies a current upside of 25.63% from current levels around $1.99. The stock has performed poorly over the last month, losing 13.57%.

13. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX): Designs, optimizes, and develops small-molecule pharmaceuticals that block key enzymes involved in infectious diseases, cancer, and inflammatory diseases. Market cap of $122.52M. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $3.50. This implies a current upside of 24.11% from current levels around $2.82. This is a risky stock that is significantly more volatile than the overall market (beta = 2.21). The stock is a short squeeze candidate, with a short float at 10.21% (equivalent to 20.04 days of average volume). It's been a rough couple of days for the stock, losing 7.19% over the last week.

14. Mine Safety Appliances Co. (NYSE:MSA): Develops, manufactures, and supplies health and safety products used by workers in the fire service, homeland security, construction, and other industries, as well as the military. Market cap of $1.19B. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $41.00. This implies a current upside of 23.90% from current levels around $33.09. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.2%, current ratio at 2.71, and quick ratio at 1.83. The stock has gained 15.66% over the last year.

15. YM BioSciences Inc. (YMI): Engages in the licensing and commercialization of drug products and technologies primarily for the treatment of cancer or cancer-related conditions worldwide. Market cap of $173.90M. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $2.04. This implies a current upside of 23.64% from current levels around $1.65. It's been a rough couple of days for the stock, losing 18.13% over the last week.

16. Human Genome Sciences Inc. (HGSI): Operates as a biopharmaceutical company. Market cap of $1.53B. Of the 17 analysts that have set a target price on the stock, the lowest price target stands at $10.00. This implies a current upside of 23.30% from current levels around $8.11. The stock is currently stuck in a downtrend, trading 22.43% below its SMA20, 33.51% below its SMA50, and 62.96% below its SMA200. It's been a rough couple of days for the stock, losing 17.89% over the last week.

17. Ironwood Pharmaceuticals Inc. (NASDAQ:IRWD): Develops, and commercializes medicines targeting therapeutic needs. Market cap of $1.22B. Of the 9 analysts that have set a target price on the stock, the lowest price target stands at $15.00. This implies a current upside of 23.05% from current levels around $12.19. The stock is a short squeeze candidate, with a short float at 9.32% (equivalent to 21.21 days of average volume). The stock has gained 11.33% over the last year.

18. Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR): Engages in the development and commercialization of novel therapeutics to treat severe lipid disorders. Market cap of $316.58M. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $19.00. This implies a current upside of 22.82% from current levels around $15.47. The stock has gained 49.02% over the last year.

19. Covidien plc (NYSE:COV): Develops, manufactures, and sells healthcare products for use in clinical and home settings in the United States and internationally. Market cap of $21.96B. Of the 20 analysts that have set a target price on the stock, the lowest price target stands at $56.00. This implies a current upside of 22.78% from current levels around $45.61. It's been a rough couple of days for the stock, losing 5.92% over the last week.

20. Exelixis, Inc. (NASDAQ:EXEL): Engages in the discovery, development, and commercialization of small molecule drugs for the treatment of cancer, metabolic, and cardiovascular disorders. Market cap of $536.92M. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $5.00. This implies a current upside of 22.55% from current levels around $4.08. This is a risky stock that is significantly more volatile than the overall market (beta = 2.1). The stock is a short squeeze candidate, with a short float at 8.36% (equivalent to 5.98 days of average volume). The stock has performed poorly over the last month, losing 30.88%.

*Target price data sourced from Thomson/First Call (via Yahoo! Finance), all other data sourced from Finviz.

Source: 20 Healthcare Stocks Deeply Undervalued By Target Price