exercept of cantechletter.com article Three Canadian-listed health tech companies worth a look
The healthcare field has been one of the last sectors to undergo disruption on a major scale, with trends like big data, remote monitoring and telemedicine only recently gaining more sway in the space. In this way, health tech companies have been taking part in the transformation in Canada and elsewhere, coming up with unique products and services and garnering investors’ attention in the process.
Here, Cantech has three such names for readers interested in the space, all with recent positive ratings from analysts.
Starting in no particular order with pharmacy services company CareRx (CareRx Stock Quote, Charts, News, Analysts, Financials TSX:CRRX), which offers specialty pharmacy services to senior care residents and home care operators. The company has been busy consolidating the space, with now over 90,000 residents being served in senior and community care homes across Ontario, Saskatchewan, Alberta and BC.
The company recently announced a 1,500-bed expansion of a contract in Ontario across 19 locations, a move which comes a month after CareRx closed on the more transformative acquisition of the long-term care pharmacy division of Medical Pharmacies Group Ltd (MPGL) for $70 million in cash and 550,359 shares of CRRX. That deal has been estimated by CareRx to add about $150 million in annualized revenue and about $10-12 million in EBITDA.
Looking at CareRx’s progress of late, iA Capital Markets analyst Chelsea Stellick said the company has made “remarkable strides” over the past year and is likely to hit its 100,000 bed goal well ahead of management’s proposed schedule.
“We continue to be impressed by management’s ability to generate rapid growth through consolidating the seniors pharmacy market in Canada, both through successful closing of synergistic acquisitions and organic contract wins as CRRX capitalizes on stronger market leadership and fewer competitors. We believe CareRx’s market position of ~94,000 beds serviced is a sustainable competitive advantage in an industry where profitability is dependent on driving efficiencies through scale,” Stellick wrote in a client update on September 14.
With her update, Stellick reiterated her “Buy” rating for CareRx while upping her target price to $9.25 per share, which represented a projected one-year return of 48.0 per cent. (All returns are listed as of the publication date of the analyst’s report.)