Quipt Home Medical Corp T.QIPT

Globe Investor Newsletter

[CashFlowRanger]

At the risk of preaching to the choir, I was pleased and reassured to read this from yesterday's newsletter:

he new Apple watch is unlikely to ever significantly affect the company’s profit margins, but the new health-related features do highlight an enormous investor opportunity in medical technology stocks.   A recent report from the U.K.’s Royal College of Nurses indicating a shortage of 40,000 nurses is only the latest sign that an aging population is stretching the capacity of developed world health care facilities.   Greater operating efficiencies through technology will almost certainly be implemented to alleviate the pressure on both doctors and, for Canada, government finances. The obvious example is the spread of remote monitoring devices so doctors are aware of risk factors like irregular heartbeats, without patients heading to the emergency department multiple times per month.

Stephanie Demko, Citi’s senior analyst in the health-care technology sector, estimates US$70-billion in new revenue for the industry if it merely implements technology to the extent the rest of the economy already does.
 

There have already been numerous success stories among health-care technology stocks, although specific stock risk remains extremely high. Teladoc Health Inc., for example, which offers medical treatment to U.S. consumers by telephone and video conferencing, has appreciated by 44.4 per cent per year for the past three years. HealthEquity Inc., which helps patients manage health care expenses, has seen their stock climb 47.5 per cent annually for the past 36 months.
 

Unlike most market sectors, rising demand for health care and health care efficiencies is virtually assured. The individual winners and losers are not yet clear, but it’s difficult to see any scenario where revenue growth in the industry isn’t well above the market average. A diversified, patient approach to medical technology stocks is among the most promising investor strategies for the long term.
 

-- Scott Barlow, Globe and Mail market strategist