The FTSE 250 contains plenty of great value stocks right now. These two have caught my eye after crashing hard. Should I snap them up before they recover?
Biotherapeutics company PureTech Health (LSE: PRTC) is popular among my fellow Fools. It’s not without risk though.
The PureTech share price has plunged 49.38% in the last three years. Over 12 months, it’s down 10.51%. The rate of descent has slowed, but not much.
PureTech is all about the future. It specialises in medicines related to the brain, gut, and immune system, and is currently pushing a pipeline of 28 therapeutics through US and EU regulatory processes.
PureTech offers outsized rewards
That involves spending bags of money on R&D today in the hope of making bags more when treatments make it to market. Inevitably, it’s a bumpy process.
Recent results make painful reading with a pre-tax loss in each the last three years. 2022 full-year revenues of $15.61m plunged to just $3.33m in 2023. Despite that, it ended the year with level cash, plus cash equivalents and short-term investments of $326m. The board says that gives it an operational runway into “at least 2027”.
CEO Bharatt Chowrira has talked up the group’s track record of clinical success, which he says is “six times the industry average”. Now he needs to make money from it.
PureTech recently treated investors to a $100m share buyback, using proceeds from the $14bn sale of the PureTech-founded Karuna Therapeutics to Bristol Myers Squibb. That’s a big buyback, given the group’s market cap of £393m. Not that it’s shifted the share price much.
The price could fly if it starts making money but it’s too risky for me to buy today. I’ll watch and wait to see what its future holds.
Assura is a dividend star
Real estate investment trust (REIT) Assura (LSE: AGR) is another Foolish favourite. It builds and manages a portfolio of community healthcare buildings such as GP surgeries, which it leases to the NHS. It’s been doing this for 20 years, now.
This should be a relatively solid investment, as rents are ultimately underpinned by local authorities. However, it’s been hit by volatile property values, swinging from a full-year profit of £155.8m in 2022 to a £119.2m loss in 2023. The culprit was the surge in interest rates following former PM Liz Truss’s mini-Budget meltdown in autumn 2022.
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The Assura share price has crashed 46.4% over three years and is down 5.5% over 12 months. It now looks decent value at 12.24 times earnings, but hardly dirt cheap.
Total revenues have been rising steadily year-on-year, despite the challenging economic environment. Net rental income climbed 9% to £138m in 2023. The pace slowed to 3.8% in 2024, though, lifting net income to £143.3m.
Assura’s balance sheet remains robust with undrawn facilities and cash of £235m, marginally down from £243m a year earlier. It could get a nice boost if interest rates fall and property prices rise.
The big attraction is the dividend, with a trailing blockbuster yield of 7.87%. Better still, the company increased shareholder payouts by 5.2% in May. That’s a brilliant income at a decent price. Plus potential share price growth too. I’ll buy it when I have the cash. And keep watching PureTech.
This post was originally published on Motley Fool
