Ever since the infamous Hillary Clinton tweet about pharmaceutical drug pricing, the biotech and specialty pharmaceutical stocks have taken a huge beating. In some cases, the markets have knocked valuations down into almost value status. The reality is while there will continue to be populist political growling, many of the specialty companies focus on generics, which by design are cheaper than name brands.

In a thorough new research report from the analysts at J.P. Morgan, they say it’s key to continue to focus on fundamentals, and with the specialty pharmaceutical stocks trading at historically low valuations, there may be some outstanding gains for patient investors. The analysts favor three large cap, diversified stocks, all are rated Overweight.

Allergan

This company remains the second largest hedge fund holdings despite the deal with Pfizer Inc. (NYSE: PFE) falling through due to regulatory issues, and is the top pick at J.P. Morgan. Allergan Inc. (NYSE: AGN) is focused on developing, manufacturing, and commercializing innovative branded pharmaceuticals, high-quality generic and over-the-counter medicines, and biologic products for patients around the world.

Allergan markets a portfolio of best-in-class products that provide valuable treatments for the central nervous system, eye care, medical aesthetics, gastroenterology, women’s health, urology, cardiovascular and anti-infective therapeutic categories, and operates the world’s third-largest global generics business, providing patients around the globe with increased access to affordable, high-quality medicines. Allergan is an industry leader in research and development, with one of the broadest development pipelines in the pharmaceutical industry and a leading position in the submission of generic product applications globally.

The J.P. Morgan price target for the stock is $325, and the Thomson/First Call consensus price objective for the stock is lower at $292.63. The stock closed Thursday at $233.51.

Mylan N.V

This is another favorite at J.P. Morgan and also sports a very appealing valuation. Mylan N.V. (NASDAQ: MYL) develops, licenses, manufactures, markets, and distributes generic, branded generic, and specialty pharmaceuticals worldwide. The company provides generic or branded generic pharmaceutical products in tablet, capsule, injectable, transdermal patch, gel, cream, or ointment forms, as well as active pharmaceutical ingredients (APIs). It is also involved in the development of APIs with non-infringing processes for internal use and to partner with manufacturers; and manufacture and sale of injectable products in antineoplastics, anti-infectives, anesthesia/pain management, and cardiovascular therapeutic areas.

Mylan had attempted a takeover of drugmaker Perrigo Company Plc. (NASDAQ: PRGO) last year which was fought off, and the company has since announced the purchase of Meda and the recent acquisition of Renaissance. The J.P. Morgan team love the company’s very attractive valuation, and trading at just over 9 times estimated 2016 earnings-per-share, it clearly is cheap.

The J.P. Morgan price target is posted at $62, and the consensus is set at $58.13. The shares closed Thursday at $46.16.

Teva Pharmaceuticals

This generic giant could be giving investors the best entry point in years to buy stock. Teva Pharmaceuticals Industries Limited (NYSE: TEVA) is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to everyday. Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products. The company integrates its generics and specialty capabilities in its global research and development division to create new ways of addressing unmet patient needs by combining drug development capabilities with devices, services and technologies.

The company acquired Allergan’s generic-drug business for $40.5 billion in cash and stock to bolster its position as the world’s largest maker of generic drugs. Combined with the largest generic pipeline in the U.S., and the possibility that 2016 emerges as the inflection year for generic approvals, the stock makes good sense for more conservative investors.

Teva investors are paid a 2.27% dividend. The J.P. Morgan price target for the stock is set at $75, with the consensus posted at $71.68. The stock closed Thursday at $51.37. As a reminder, Teva is one of the 24/7 Wall St. 10 Stocks to Own for the Decade.

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Three top companies, all trading at bargain basement levels, and make good sense for long term growth portfolios. While the political rhetoric could stay around through the general election in November, it makes sense to consider these out-of-favor stocks now.

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