WELL Stock: The Safe Stock Investors Can’t Afford to Ignore

WELL stock (TSX:WELL) fell 68% from peak to trough, and yet there’s no good reason as to why. So now is the time to buy!

| More on:
healthcare pharma

Image source: Getty Images

WELL Health Technologies (TSX:WELL) has gotten a bad wrap over the past few years. WELL stock originally soared in the early days of the pandemic. As a telehealth provider, it was one of the companies that proved invaluable during stay-at-home orders.

However, when a vaccine became available, and tech stocks started to fall, WELL stock fell as well. But was the drop really deserving?

In short: No

WELL stock fell because its in the tech industry, a new company on the stock market, and a pandemic stock. That’s it. In short, there is no tangible reason why the company should have been dropped the way it was.

So after climbing 1,843% between January 2019 and February 2021, shares started plummeting. As of writing, WELL stock is down 68% from those all-time highs. Sure, it’s still a new stock, and it definitely got a push during the pandemic, but overall it’s still a strong company. Let’s look at why.

Strength in numbers

One way you can see the value of WELL stock is by looking at its earnings reports. Not only are earnings still strong for the company, they continue to report record-setting earnings quarter after quarter.

Most recently, WELL stock reported a 127% increase in revenue year over year to $140.3 million. It achieved adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $26.4 million, and net income of $17.2 million compared to a loss the year before.

What’s more, the company increased its annual revenue guidance for the third straight quarter. It now expects revenue to exceed $550 million, up from $525 million. WELL should therefore generate about $100 million in adjusted EBITDA.

Fundamentally strong

So the company is growing rapidly, both in profit and market presence. Management continues to raise guidance, and WELL now spans from Canada into the United States. And yet it’s still so incredibly valuable at today’s prices!

WELL stock offers a price-to-book ratio of just 0.96 as of writing. Further, it has a solid balance sheet, with just 47.9% of its equity needed to pay off all its debts. That’s after this major share drop!

Economists continue to drool over the stock, and its long-term potential. Telehealth is here to stay, and continues to expand. WELL stock meanwhile is now Canada’s largest outpatient clinic! So that puts it at the top of the list when it comes to future potential for growth in this space.

Bottom line

WELL stock is an incredibly valuable stock to pick up right now. It offers stability, has a solid balance sheet, continues to grow both organically and through acquisitions, and trades at a low price. In fact, within a year from now this stock could double your returns.

How do I know? Consider if WELL shares were to return to 52-week highs, when they traded at $7.18. Right now, shares are only at $2.96. That’s a potential upside of 143%! Even if you have only a little cash on hand, WELL stock fits into practically any portfolio. Especially for those willing to wait a year to see this company make a major turnaround.

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 Amy Legate-Wolfe has positions in WELL Health Technologies Corp. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Coronavirus

Double exposure of a businessman and stairs - Business Success Concept
Stocks for Beginners

3 Things About Couche-Tard Stock Every Smart Investor Knows

Couche-tard stock (TSX:ATD) may be up 30% this year, but look at the leadership and history of the stock to…

Read more »

Plane on runway, aircraft
Coronavirus

Can Air Canada Double in 5 Years? Here’s What it Would Take

Air Canada (TSX:AC) stock has gone nowhere since 2020. Can this change?

Read more »

Senior housing
Stocks for Beginners

Home Improvement Stocks Are Set to Fall (When They Do, Buy These Like Crazy!)

Home improvement stocks are due to drop further in the coming months. But with solid underpinnings for the sector, it…

Read more »

An airplane on a runway
Coronavirus

Forget Boeing: Buy This Magnificent Airline Stock Instead

Boeing (NYSE:BA) stock is looking risky right now, but Air Canada (TSX:AC) stock? Much less so.

Read more »

Man considering whether to sell or buy
Stocks for Beginners

Goeasy Stock: Buy, Sell, or Hold?

When it comes to smart buys, goeasy stock (TSX:GSY) is up there as one of the smartest money can buy.…

Read more »

Woman has an idea
Stocks for Beginners

Here’s Why Magna International Is a No-Brainer Value Stock

Magna stock (TSX:MG) has been climbing back once more, but still offers huge value for long-term minded investors.

Read more »

Aircraft wing plane
Coronavirus

1 TSX Stock Down 60% That Could Bounce Back Stronger

Air Canada (TSX:AC) stock got severely beaten down in the March 2020 COVID crash. Here's why it's probably not going…

Read more »

A bull and bear face off.
Stocks for Beginners

Down 30% in 3 Months, Is AC Stock a Buy Today?

Air Canada stock (TSX:AC) climbed this year and is still up 10% in the last year, but down 30% in…

Read more »