Throughout 2022, many stocks have lost a tonne of value, and many are trading at attractive values today. Without a doubt, though, some of the best value and top stocks to buy now are growth stocks that trade well off their highs.
Plenty of growth stocks, particularly tech stocks, have lost significant value this year — some of which have lost value, as they are being impacted by the economy. However, the majority of these stocks are seeing contractions in their valuation metrics, despite the fact that they are still growing their core business operations.
In WELL Health Technologies’s (TSX:WELL) case, the stock is down almost 60% from its 52-week high. Meanwhile, the high-potential healthcare tech stock continues to report strong growth each quarter. So, as the stock continues to trade at unbelievably cheap prices, the opportunity for investors continues to become more compelling.
This discount won’t last forever, though. So, while the market is impacted and these growth stocks continue to trade ultra-cheap, here’s why WELL is one of the best investments to buy now and hold for at least the next decade.
WELL has built an attractive portfolio
Over the past few years, WELL’s growth has come mainly from acquisitions. However, while the company was acquiring a tonne of businesses and doing it rapidly, WELL has shown that it’s put together an attractive portfolio of top-notch healthcare businesses that provide impressive synergies and complement themselves well.
In addition, many of the businesses it has acquired have tonnes of organic growth potential themselves. So, even though its acquisitions have slowed down in recent quarters, the company continues to grow at an attractive pace.
At the end of 2020, WELL’s total revenue for the year was just over $50 million. Fast forward a year and a half, and the stock is now earning more than double that in a single quarter. In fact, for the full year, WELL is expected to do over $525 million in sales — a 950% jump in revenue in just two years.
The healthcare sector is considerably defensive
Another reason why WELL is one of the best growth stocks to buy now and one you can have confidence owning for years is that the healthcare industry is defensive. Therefore, not only will it see less of an impact from high inflation or a recession than other industries, but a lot of the funding and capital for healthcare either comes from or is subsidized by the government.
In addition to how defensive healthcare is, the industry is also in need of innovation, particularly technology that will help optimize the sector and bring significant improvements.
While the stock has fallen out of favour since the tailwinds from the pandemic no longer persist, over the long haul, its technologies and the convenience they allow for will continue to help the company grow organically and expand its operations.
Lastly, and most importantly, WELL Health trades unbelievably cheap
WELL is a high-quality growth stock, but one of the number one reasons to buy the stock is due to the value it offers at these prices.
Currently, WELL trades at a forward enterprise value (EV) to sales ratio of just 2.1 times. That’s ultra-cheap for a high-growth stock like WELL, but it’s also extremely low compared to its historical valuation.
Over the last year, for example, WELL’s forward EV-to-sales ratio has been closer to 3.1 times. And at the end of 2020, back when it was doing only about 10% of the revenue it’s expected to do this year, WELL’s forward EV-to-sales ratio was a whopping 13.7 times. Therefore, the value it offers today undoubtedly makes WELL one of the best growth stocks to buy and hold for the long haul.
The healthcare tech stock is already a high-quality company with enough growth potential to make it an attractive long-term investment. So, when you consider just how cheap it is today, the potential for investors to earn significant returns on their investment over the next decade makes WELL one of the very best Canadian growth stocks to buy now.