Capital gains investors are in luck today if they happen to be looking for a healthcare-related stock on a tear. The following natural health product manufacturer is today’s breakout stock, with a rapidly rising share price that momentum and capital gains investors should jump on before it’s too late.
It’s also a high-quality dividend stock, meaning that several different investment styles can be covered with just one pick. However, what it is not is a value stock. But should wild market fundamentals put you off some sweet upside, or a potential TFSA stocking filler? Let’s dive into some figures and find out.
Jamieson Wellness (TSX:JWEL)
This popular stock often gets some glowing write-ups as a strong buy for tax-free savings accounts; its positive momentum also makes it a good choice for anyone hunting upside. In case you don’t know, Jamieson Wellness produces natural health products on a global scale, and is involved with their marketing as well as their development and manufacture.
How does this stock fare on market fundamentals, though? Overvalued by about a dollar a share compared to its future cash flow value, it’s about where it should be in that regard. However, a P/E of 208.2 times earnings tells a different story, with a PEG ratio of 4.7 times growth confirming high overvaluation. A P/B of 4.4 times book is actually fairly good for the Canadian personal products industry, though of course this is not ideal compared to the market.
Growth investors should take note that a 44.5% expected annual growth in earnings is on the cards over the next 1 to 3 years. While its debt level of 77.2% of net worth is significant, it’s certainly not the worst on the TSX, though a return on equity of 6% last year could be better. A dividend yield of 1.4% adds to the quality of this stock, while a steep upward trend of Jamieson Wellness’ share price at the moment makes it a very strong contender for momentum investors.
If you are looking for competitors, Pfizer, Procter & Gamble, and Costco Wholesale would be the closest analogies.
The JWEL in your crown?
To make a ticker-based pun, this stock could be the JWEL in the crown of your momentum investment portfolio right now. Joking aside, the positive momentum offered by this stock means that capital gains investors have a clear opportunity to cash in by riding the updraft of its share price. It also adds to the overall buy signal that most stock screening tools would return for Jamieson Wellness at the moment.
Another good indicator of self-confidence in this stock is the fact that over the last 12-month period, more shares have been purchased than sold by insiders. While this doesn’t tell us too much about the quality of this stock on its own, this fact goes some way towards its current “buy” status.
The bottom line
For capital growth plus a dividend, you’re likely in good hands with this stock. It’s high-quality and has cornered a growth market. In terms of positive momentum, you can’t do better at the moment. In short, this is a rare stock that should satisfy both passive income investors looking to line a TFSA or RRSP and capital gains investors looking to ride a rising share price.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Victoria Hetherington has no position in any of the stocks mentioned.