WELL:CC - Down 30% Over the Last 6 Months Is Well Health Stock a Buy Today?
2023-11-07 21:30:00 ET
Although there certainly isn’t a shortage of ultra-cheap Canadian stocks to buy now in this uncertain market environment, without a doubt, one of the best investments to consider today is WELL Health Technologies ( TSX:WELL ) stock, especially after its performance in the last six months.
WELL started the year off strong, gaining roughly 100% between January and May. However, despite its core operations consistently growing, the lack of tailwinds it experienced since the pandemic has been apparent as the stock has continued to fall in value ever since.
To start 2023, though, it looked like WELL’s share price could finally start to turn around. There was hope that interest rates would peak early in the year, benefitting stocks across the board, but especially high-potential growth stocks like WELL.
That clearly never materialized, and despite the stock continuing to see impressive organic growth it’s consistently lost value, now trading right around $4 per share.
Why is WELL Health one of the best stocks to buy now?
Anytime you can buy a stock undervalued , you put yourself in an excellent position. Not only should you make an attractive return, as the market environment normalizes and valuations rise back to their long-term averages, but you also give yourself a margin of safety in case the company’s operations worsen before they recover.
When you can buy a growth stock undervalued, though, especially a high-potential growth stock, you not only have the potential to see a significant return when market conditions improve, but you could also see years of significant gains, as the stock consistency expands its operations.
And while there are several high-quality growth stocks for Canadian investors to buy now, WELL has consistently shown it’s one of the best of the best.
For example, in 2022, even after many of the pandemic tailwinds were no longer benefitting WELL, the stock still managed to grow its sales by a whopping 88% year over year. And this year, analysts estimate WELL’s revenue will grow by another 33%.
This growth is significant because WELL is now working on improving its profitability. So, it’s not just an early-stage healthcare tech stock anymore.
Another reason WELL Health is one of the top Canadian stocks to buy now is that it serves one of the most defensive and reliable industries there is.
So, while many tech stocks like it could struggle in these environments, because WELL serves the healthcare sector, it can continue to grow its operations.
For example, this morning, WELL announced that it once again saw a record number of patients in the third quarter, which, unsurprisingly, led to another quarter of record revenue generation for the stock.
So, the fact that it’s such a high-quality growth stock and the fact that it serves such a defensive industry is making WELL one of the cheapest stocks on the market today.
How much value does the healthcare tech stock offer?
Although WELL Health stock is down 30% in the last six months, it’s also down by over 40% in the last two years. At the same time, the company more than tripled its revenue.
Today, WELL trades at a forward price-to-sales ratio of just 1.1 times. That’s well below its average over the last two years of 1.6 times and the high throughout that stretch of more than 3.5 times.
Furthermore, with the stock now generating a profit, it trades at a forward price-to-earnings ratio of just 12 times. That’s considerably cheap for almost any stock, but especially a small-cap tech stock with years of growth potential ahead of it.
Therefore, if you’ve got some cash that you’re looking to invest and want to take advantage of the significant opportunity the market offers today, WELL Health is certainly one of the top Canadian stocks to buy now.
The post Down 30% Over the Last 6 Months, Is Well Health Stock a Buy Today? appeared first on The Motley Fool Canada .
Fool contributor Daniel Da Costa has positions in Well Health Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
2023