Billionaire Portfolios: 2 Under-$20 Healthcare Stock Picks

The recent success of Moderna has left some investors scrambling to find the next big thing in healthcare and biotech. However, it’s essential to separate speculation from solid investment opportunities. Two stocks that have caught the attention of billionaire-led funds are Viatris and BioCryst, both trading under $20.

Investors often flock to low-priced stocks in hopes of catching a rising tide, but this can sometimes lead to overoptimism. In the case of Viatris and BioCryst, billionaire-led funds have indeed invested heavily. A closer look at these companies’ prospects reveals that the allure of cheap stocks can cloud investors’ judgment.

Viatris is a generic drug manufacturer with an impressive pipeline. Recent FDA approvals for its Gwyn Lo contraceptive patch and a fast-acting version of meloxicam are significant catalysts for growth. The company’s estradiol patch has seen increased demand following a label change by the FDA last year. These developments suggest that Viatris is indeed on the right track.

However, it’s crucial to examine valuation metrics before getting swept up in the excitement. With a forward non-GAAP P/E of 6.6 and an EV/EBITDA ratio of about 7, Viatris trades at a significant discount compared to its peers. This might seem like a bargain, but investors should consider the potential risks associated with tariffs and the expiration of generic exemptions in 2028.

Tariffs have been a persistent threat to pharmaceutical companies, particularly those that import heavily like Viatris. The looming tariffs on Indian generics starting in August 2028 will directly affect the company. While management claims that over half of US revenue comes from domestically manufactured products, this may not be enough to shield the company entirely.

The biotech sector is notoriously unpredictable, with many companies experiencing wild fluctuations in stock prices. As we’ve seen with Moderna, success can come unexpectedly, but it also means that investors must remain vigilant and not get caught up in the hype. By taking a step back and examining the fundamentals, we can separate speculation from solid investment opportunities.

Viatris’s low price doesn’t necessarily make it an undervalued gem; instead, investors should focus on the company’s long-term prospects and be prepared for potential headwinds. With its significant growth catalysts and relatively low valuation, Viatris is a stock worth considering, but careful analysis is essential to avoid overoptimism.