Difference Capital Managing Partner Tom Liston recently joined the board of QHR Technologies.

The stock has been a notable performer since this time last year, but some of those closest to QHR Technologies (TSXV:QHR) think a recent pullback is a perfect opportunity to add to their positions.

Board members Tom Liston and Mark Kohler have made recent purchases of QHR in the open market. On June 24th, Liston picked up 20,000 shares on day the stock closed at $1.18. A month earlier, Kohler bought 3500 shares at $1.27.

On June 9th, Paradigm Capital analyst Gabriel Leung assigned Top Pick status to the Kelowna-based QHR. Leung, who has a $2.00 one-year target on the stock, says says the continued adoption of Electronic Medical Records and its relatively low penetration rate to date means the company has plenty of runway left. Add its recent entry into the U.S. market, and the Paradigm analyst thinks its current 10.4x EV/EBITDA valuation is cheap. He notes that comparable high recurring revenue software-as-a-service companies are trading at more than 18x EV/EBITDA.

Leung says a realistic potential catalyst for QHR comes in the form of a possible takeout from national telecom provider Telus, which has undertaken an aggressive entry into the Electronic Medical Records space. Leung says QHR would be a “natural fit” for Telus.

At press time, shares of QHR Technologies were even at $1.20.

Disclosure: QHR is an annual sponsor of Cantech Letter.

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