There were a few companies that absolutely surged back during the early days of the pandemic. Once the crash was over, these companies soared as consumers needed two things: to stay safe at home and still receive healthcare.
So, it’s no surprise that shares of WELL Health Technologies (TSX:WELL) absolutely destroyed the market. But since then, they’ve also been subject to a crash in the market as well. This crash caused both tech stocks and healthcare stocks to drop. And WELL stock wasn’t immune.
So, now, with shares trading under $4 per share, what have investors who got in before the climb earned? And can it come back?
A bit about WELL stock
WELL stock is a digital health company that came on the scene back in 2010. It owns and operates healthcare facilities both in Canada and the United States. It provides software-as-a-service (SaaS) electronic medical records (EMR) services to clinics and doctors.
While the company started out with these EMR services, it then went over to telemedicine, cybersecurity, billing, digital apps, and recently even artificial intelligence. The company saw shares rise substantially between going public in 2020 and its peak in February 2021. However, it then came under a short-seller attack.
All combined, the company should have seen performance drop as well — especially given that pandemic restrictions are a thing of the past. The thing is, these restrictions might be gone, but telehealth has become a part of our daily life, which is why the company continues to expand.
Growth and more growth
There are two ways that WELL stock has been growing.
It has grown through many mergers and acquisitions. This included acquiring United States-based CRH Medical in 2021 and ExecHealth in 2021. The company is also in the process of purchasing Toronto’s MyHealth Centres, adding another 48 clinics.
But it wasn’t just acquisitions causing growth. Organic growth has also been up, with the company recently seeing its shares climb by 11.5% after reporting record positive earnings for a 20th consecutive quarter.
This included 18% quarter-over-quarter growth in WELL stock’s patient visits and total care interactions. The company achieved 1.22 million of the former and 1.87 million of the latter during the fourth quarter. So, if you think only acquisitions are powering the company forward, think again.
So, what’s the problem?
The problem is that all these investments and opportunities still cost money. This has led to higher margins than analysts like. So, if you were to have purchased WELL stock back in February 2020 with $5,000, you would have 2,994 shares. That would still have more than doubled to $11,347.26 today!
But most of us didn’t invest at this time. In fact, most investors probably bought closer to those all-time highs. In that case, you could see shares valued at half of where they were back then. So, there are a few changes that investors can look out for to experience more growth.
One would be opportunities with lower margins, such as primary care clinics, that would also provide more growth. Yet, many of these purchases have yet to come into full play. This means there will be even more growth for investors in the future. In fact, the purchases have been made at incredibly steep discounts, allowing for long-term growth for shareholders.
Sure, you may have lost money, but with shares back where they were in 2020, now could certainly be the time to buy WELL stock once again.
