The cannabis sector suffered a major setback in 2019. It was a disastrous year as the top and second-tier weed stocks lost significant market values.
If you look at the performances, seven of the bottom 100 stocks as of December 16, 2019 are cannabis companies, including industry leaders Aurora Cannabis and Canopy Growth.
One small-cap healthcare stock outperformed the entire cannabis sector. This $155 million company is turning out to be a better and less risky investment option compared with weed stocks. Also, this stock belongs in the top 100 stocks as the year comes to a close.
Profound growth
Profound Medical (TSX:PRN)(NASDAQ:PRN) is based in Mississauga, Canada and operates as a medical technology company. The stock is performing exceptionally well so far this year.
From $6.50 in year-end 2018, the price has soared to $13.05, as of this writing. It’s a gain of 100.77% and approaching its 52-week high of $15.90.
With the exponential increase, PRN would no longer be flying under investors’ radars. Market analysts covering Profound are recommending a “buy” rating.
The price forecasts in the next 12 months is between $21.72 (+66.3%) and $33.92 (+160%). Profound is a stock that could explode in 2020.
Company profile
Profound is the first-ever company to merge three powerful modalities or sensory systems into customizable, incision-free therapy platforms. These modalities are real-time magnetic resonance imaging (MRI), thermal ultrasound and closed-loop temperature feedback.
The company has to pioneering systems for male patients (inside-out disease ablation) with prostate conditions and women patients (outside-in disease ablation) with uterine fibroids.
The Tulsa system is designed to provide customizable and predictable ablation (cutting/removal) of a surgeon defined region of the prostate while actively protecting the urethra and rectum to help preserve the patient’s natural functional abilities.
On the other hand, the Sonalleve system offers incision-free alternatives to traditional surgical treatments of uterine fibroids. It enables incision-free, radiation-free palliative treatment of pain associated with bone metastases.
According to management, Tulsa is a novel technology for men, while Sonalleve is an innovative therapy platform for women. They are intended to treat and preserve the quality of life of both genders.
Target markets
Profound Medical graduated from the TSXV and debuted on the TSX last July 13, 2018. Last October 29, 2019, the company listed on the NASDAQ.
Health Canada approved the Tulsa last month, although the commercial opportunity in the country is modest until the government reimbursement is established. However, the approval is vital to the company’s global expansion strategy.
According to Dr. Arun Menawat, Profound CEO, the U.S market is a key target for the Tulsa. With the clearance from the U.S. FDA, Dr. Manawat views the NASDAQ listing as a natural extension of the company’s growth plan. The Sonalleve system was approved by the National Medical Products Administration in China.
Exciting prospect
While Profound Medical is incurring losses, the sentiment on the stock is bullish. But unlike weed stocks, the stock price continues to appreciate. Once the commercialization of the systems begins, management expects a turn to recurring revenue.
