Possibleidiot01 wrote: from cantechletter.com today
Second, Cooper said healthcare stocks, especially in the smaller cap group, are currently trading at valuations well below historical norms. To that end, the analyst highlighted four names in his coverage universe that should do well over the next 12 months.
In the pharmaceutical space, Cooper recommends pharmacy services company CareRx (CareRx Stock Quote, Charts, News, Analysts, Financials TSX:CRRX), saying the company plays a key role in supporting long-term care facilities for the supply of chronic medications and as the largest and fastest-growing provider of pharmacy services to seniors homes and other care settings, CareRx will be meeting the rising demand from the seniors cohort as it ages, reaching 9.5 million in Canada in the next ten years and pushing up the number of people living in assisted living by 86 per cent to 670,000 over that same time period.
“Based on its record Q4/FY21 results, CRRX serviced 96,310 beds. This equates to ~25% market share across the country albeit the share is larger in the geographies in which it operates as it does not currently have a presence in Quebec or the Maritimes. The company has set a target of 130,000 beds serviced (very conservative in our view) over the next two years,” Cooper wrote.
The analyst said CRRX currently trades at 0.9x/9x his fiscal 2022 Sales/EBITDA and 0.8x/7.5x his 2023 estimates versus its closest comparable, Neighbourly Pharmacy, at 1.8x/14x consensus estimates, putting CRRX at about a 50 per cent discount currently.
“Given the demographic trends in terms of an aging population, the expansion of the number of beds to service them, that 65+ age cohort consuming the largest per capita prescription drugs and CRRX having, by far, the leading market share in Canada, we remain very bullish as to the outlook for the company,” Cooper wrote.
Cooper reiterated his “Buy” rating on CareRx and $10.00 target price, which at the time of publication represented a projected one-year return of 86.9 per cent.