3 Dirt Cheap Stocks to Buy Right Now

By most metrics, the stock market is overpriced these days. But that doesn’t mean bargains can’t still be found.

Three Motley Fool contributors believe they’ve identified very cheap healthcare stocks to buy right now. Here’s why they chose CRISPR Therapeutics (CRSP -2.65%), Gilead Sciences (GILD 0.05%)and Pfizer (PFE -0.81%).

You can still enter the ground floor

Prosper Junior Bakiny (CRISPR Therapeutics): Valuing relatively small biotech companies that generate little or no revenue is not an exact science. Even so, CRISPR Therapeutics, a gene-editing specialist, looks cheap at current levels. CRISPR Therapeutics’ market cap is $4.2 billion, despite the recent approval of Casgevy, a treatment for two blood-related diseases it co-developed with Vertex Pharmaceuticals.

CRISPR Therapeutics and Vertex Pharmaceuticals are chasing a massive opportunity with Casgevy. The drug costs $2.2 million in the US. They estimate a market of 35,000 patients in the US and Europe, with another 23,000 in some Middle Eastern countries where Casgevy is also approved. CRISPR Therapeutics should eventually generate more than $1 billion in sales from Casgevy.

The company has also shown that its gene-editing platform can produce tangible results in unlocking treatments where few are available. There’s a world of opportunity: lots of conditions don’t have approved treatments. Many others are in urgent need of better standards of care. One of CRISPR Therapeutics’ most promising projects is its work in type 1 diabetes for which the company is trying to develop a working cure.

In my opinion, CRISPR Therapeutics is a biotech giant in the making. Casgevy will bring funds that will help it advance its gene editing platform. Over the next five years, expect more clinical and regulatory progress from the company. Although CRISPR Therapeutics has delivered strong returns since its 2016 initial public offering (IPO), it remains a substantial upside for the biotech, at least for investors willing to be patient.

Gilead Sciences could make for an undervalued growth stock

David Jagielski (Gilead Sciences): What’s the top pharma stock you won’t want to overlook right now? Gilead Sciences. While the single-digit (and sometimes negative) growth rate may seem unimpressive over the past few years, the company possesses some promising catalysts that may lead to stronger numbers going forward. Plus, it pays a great dividend yield of 3.7% — nearly three times better than S&P 500 average of 1.3%.

Gilead Sciences recently announced that the twice-yearly HIV treatment lenacapavir was highly effective in preventing HIV. It dramatically reduced infections by 96 percent in a phase 3 trial. Analysts estimate the drug, which is already approved to treat people with multidrug-resistant HIV, could generate $4 billion in peak sales. This could be a sizeable revenue generator for the business, as last year Gilead’s sales exceeded $27 billion.

Lenacapavir could do wonders for the company’s HIV business, which has been Gilead’s slowest growth in recent memory. In the first six months of 2024, HIV sales rose just 3% year over year to $9.1 billion. While this is still the company’s largest segment, growth rates in liver disease (13%) and oncology (17%) have both been much higher over that time frame and also represent exciting growth opportunities for the business in the future.

Although Gilead shares have risen a bit this year, the biotech stock is trading at a paltry 12 times estimated future earnings (based on analyst expectations). For long-term investors, this could be a great stock to buy and hold.

More than meets the eye

Keith Speights (Pfizer): Pfizer has been a big loser over the past few years, although it posted a weak gain in 2024. However, I believe there is more to this big drug maker than meets the eye.

You can blame much of Pfizer’s woes on declining sales of its COVID-19 products. I don’t anticipate the company ever seeing the booming numbers of 2021 and 2022 again. But I also think 2024 could be a low year for Pfizer’s sales of the COVID-19 vaccine.

The other big challenge for the company is the impending expiration of patents for several of its top products. Unfortunately for Pfizer, the list includes blockbuster drugs Eliquis, Ibrance, Vyndaqel, Xeljanz and Xtandi.

However, Pfizer is not blinded by this patent cliff. It has invested in new product development, with the respiratory syncytial virus (RSV) vaccine Abrysvo particularly notable. The company also used the huge cash generated by its COVID-19 vaccine during the worst of the pandemic to fund key acquisitions, including the acquisition of Seagen in 2023. As a result, Pfizer should be able to deliver solid growth in the coming years, despite losing patent exclusivity for several products.

Meanwhile, the pharmaceutical stock is priced low. Pfizer shares trade at just 10.6 times forward earnings. That’s much lower than the S&P 500 healthcare sector’s forward earnings multiple of 19.6.

If you’re looking for another reason to buy this cheap stock, check out the dividend. Pfizer offers a forward-dividend yield of 5.65%. Even better, the company’s management remains committed to increasing its dividend payout over time.