VMD - 2 Growth Stocks With High Return Potential
People invest in stocks to grow their money, save for the future, or earn profits. Also, historically, the asset class has delivered the highest returns compared with other financial instruments. Cash is king, but expect negative returns if you keep it idle, especially when you factor in inflation.
The TSX offers excellent choices for growth investors seeking a good return on investment (ROI) in the short term. Usually, the time frame for short goals is within six months to three years. A period beyond three years is considered long-term. Sometimes, long-term goals have short-term goals in them.
Currently, Viemed Healthcare (TSX:VMD) (NASDAQ:VMD) and Fire & Flower (TSX:FAF) have ‘”buy” to “strong buy” ratings from market analysts. They forecast a return potential of between 80% and 120% in one year. You can take advantage and load up on the stocks this month while the share prices are absurdly low.
Major growth segment
Increasing the quality of life of Americans afflicted with respiratory diseases is the primary mission of Viemed Healthcare. This $283.45 million company that provides home medical equipment and home therapy services to patients has been operating since 2006. The respiratory diseases include chronic obstructive pulmonary disease (COPD), chronic respiratory failure, and neuromuscular diseases, among others.
The addressable market is vast, considering the report that says about 25 million Americans suffer from various respiratory diseases. Viemed helps alleviate the growing burden on the U.S. healthcare system by offering home treatment products and services. Moreover, home-based solutions are more cost-effective to patients.
Viemed’s $26.3 million net revenues attributable to the core business in Q2 2021 was a new company record. Management expects to generate $26.8 million to $27.8 million in Q3 2021, which would mean another milestone. Its CEO, Casey Hoyt, said, “We continue to see treating respiratory patients in the home as a major growth segment.”
Market analysts are bullish on Viemed. Their average 12-month price target is $13.12, or an 85% climb from the healthcare stock’s current share price of $7.10.
Best bargain deal
Fire & Flower in the cannabis space is more attractive than the industry leaders based on market analysts’ forecasts. They see a 124.32% upside potential in 12 months compared to 66.15% for Canopy Growth and -3.87 for Aurora Cannabis. Similarly, this small-cap weed stock is a bargain deal at only $0.73 per share.
This $271.69 million independent retailer sells cannabis products and accessories through its retail stores in five provinces in Canada. Alimentation Couche-Tard is a strategic partner. The king of convenience stores has a 22.35% ownership stake which could increase to as much as 50.1% soon.
The technology-powered, adult-use cannabis retailer is nearing the road to profitability, given the top-line results in the first half of 2021. Revenue growth was 69% compared to the same period in 2020. Notably, it was the fifth consecutive quarter of adjusted EBITDA. Management said Fire & Flower’s Hifyre business segment is growing at a rate significantly greater than past quarters.
Superior returns
Viemed Healthcare and Fire & Flower are ideal for growth investors with short-term financial objectives. The finance performance in 2021 has so far been impressive. You have better chances of realizing higher, if not superior , returns as the respective businesses thrive in the post-pandemic world.
The post 2 Growth Stocks With High Return Potential appeared first on The Motley Fool Canada .
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC and Viemed Healthcare Inc.
2021