The harsh economic climate over the last few years has not been kind to several top stocks that boomed amid the pandemic. Growing inflation and higher interest rates combined to increase living costs for consumers. Publicly traded companies that rely a lot on debt to fund capital programs also suffered under the weight of financial pressure of higher borrowing costs due to higher interest rates.
The recent key interest rate cuts provided some much-needed relief to consumers and the stock market, with several high-quality Canadian stocks posting a rapid recovery. Rate cuts act like a shot of adrenaline for the stock market, as evidenced by the recent uptick in the S&P/TSX Composite Index. As of this writing, the Canadian benchmark index is up by 13.44% year to date, hovering around new all-time highs.
However, not all TSX stocks have posted a solid recovery, and there is one that might be too attractively priced right now to pass up. WELL Health Technologies (TSX:WELL) remains considerably cheap. Today, we’ll discuss whether it might be the right time to buy its shares.
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WELL Health Technologies
WELL Health Technologies is a tech stock that stands out from the rest of the sector due to its involvement in the healthcare industry. The $1.09 billion market capitalization company headquartered in Vancouver is the biggest telehealth operator in the country.
It owns and operates a portfolio of outpatient health clinics. It also has several primary healthcare facilities in Canada and the U.S., providing electronic medical record services to doctors and clinics throughout Canada.
The stock came into the limelight during the pandemic, when social-distancing measures forced many to people to resort to telemedicine. It became one of the few businesses that thrived during the pandemic and saw significant growth in operations. While telehealth was already a growing industry, the pandemic put wind in its sails.
Despite consistently growing its revenue and profitability over the last few years, the end of the pandemic has seen it fall out of favour among investors. Granted, telehealth might not be as in-demand as it was during the pandemic.
Still, the company has diversified its business, allowing it to post impressive revenue growth and profitability. For any sound and seasoned investor, the fact that it trades so cheaply is surprising.
As of this writing, WELL Health stock trades for $4.38 per share. Down by over 50% from its 2021 all-time highs, it might be an excellent bet to capitalize on when investor sentiment finally reflects the intrinsic value of the underlying company.
Foolish takeaway
The shifts in the economic environment, especially over the last two years, have created several opportunities for value-seeking investors. As inflation cools off, the market volatility is making way for a rally for the broader market to reach newer heights.
Rate cuts have historically signalled improved stock market performance across the board. The current uptick in the benchmark index reflects the trend. While many stocks have already recovered to better valuations, a few lag behind the broader market.
As WELL Health stock continues growing its sales and profitability, it might be an excellent time to invest in its shares before its value soars to a fair value and beyond.
