SMLR - Semler Scientific: Not Perfect But Worth Considering

2024-04-30 21:00:10 ET

Summary

• SMLR has a competitive product (QuantaFlo) in the cardiovascular diagnostic space, and is currently awaiting a 510(k) clearance for expanded use, which could potentially arrive in H2-24.
• Semler's cash generating prowess has picked up over time, and currently 73% of its asset base consists of cash alone.
• P/E Valuations are cheap, and buyback momentum is likely to step up.
• The phasing in of a new Medicare Advantage (MA) risk adjustment model (versus the 2020 version) is expected to dampen enthusiasm for QuantaFlo from MA plan sponsors.
• We like the reward to risk equation on the charts, and Semler could benefit from additonal rotational interest given its low relative strength ratio vs other healthcare options.

Introduction

Semler Scientific Inc. ( SMLR ) is a micro-cap stock that is noted in the healthcare equipment space for its diagnostic offerings in treating chronic diseases. Over the last six months, the SMLR stock has faced a wobbly ride and has ended up losing 4% of its value, even as its peers from the healthcare universe have generated steady returns of 16% during the same period....

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