This Stock Is Miles Ahead of its Industry: Is it a Buy Now?

This company has been making significant waves since the beginning of 2024.

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The TSX is divided into a handful of sectors and dozens of industries, sometimes with significant overlap among them. However, outliers exist in both sets, despite their significant size differences, as industries can be small enough to contain just a few stocks, while sectors are usually made up of hundreds of publicly traded companies.

One example of a relatively small industry is healthcare services, particularly with a tech lean, and in this industry, one company has been making significant waves since the beginning of 2024.

A healthcare company

Healwell Ai (TSX:AIDX) classifies itself as a healthcare technology company, and if you look at the name, you can identify the specific tech niche the company operates in: artificial intelligence (AI). It focuses on data sciences and leverages the power of AI for preventive care. However, it’s not an official part of tech stocks and qualifies as a healthcare company (its primary industrial affiliation).  

It’s important to understand that AI’s applications in the healthcare industry have been studied and researched for years, and many practical applications, including diagnostics, are almost ready to be augmented in the healthcare flow in many countries/organizations. Healwell Ai seems a promising venture in this domain, but that’s not all that makes it interesting.

The company is partnering with Well Health Technologies, one of the most prominent names in the digital healthcare space in Canada, offering services to thousands of healthcare professionals. Well Health is also heavily invested in Healwell, owning over 20% of the company. The partnership benefits both companies, as Healwell gets access to Well Health’s massive network, and Well Health gets a strong AI front.

The stock

Healwell Ai stock has risen over 300% since the beginning of 2024, which is kilometres ahead of other tech stocks in Canada and miles ahead of most healthcare stocks, the two sectors/industries it’s affiliated with. The growth is relatively rapid, even for an AI stock, if that’s how we interpret it. But its trajectory has yet to be bullish since its inception.

When the stock initially joined the TSX (2021), it spent more than two years in a massive slump and lost over 98% of its market value. Even now, after its powerful bull market phase that propelled it over 3,100% from its lowest point, the stock is trading at a modest price of about $3 per share.

Foolish takeaway

You may have missed the chance to capture the stock’s current growth momentum from its starting point, but that doesn’t mean you should discount the stock entirely. Its upward trajectory is still quite impressive, and at its current pace, it might offer better returns in weeks than many growth stocks offer in months or even years.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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