So far, small-cap Viemed Healthcare (Viemed Healthcare Stock Quote, Chart TSX:VMD) has done extremely well over its short life as a public company, with the stock now up almost 350 per cent since its debut in December 2017. And there could be more upside to come, says portfolio manager Kim Bolton of Black Swan Dexteritas.
“We don’t own it but we do follow it. It’s an interesting company,” says Bolton, founder and president of Black Swan, in conversation with BNN Bloomberg Wednesday. “They’re a supplier of home-care medical respiratory-type products. It’s a fair size —it’s got a market cap of about C$280 million, but there aren’t many people who actually follow it. We predict that if you look out 12 months, you could get it up to C$9.50 or C$10.00.”
VMD reached a high of $8.75 in mid-October of last year before dropping down to the $5.00 range. The stock then began to rise again starting in late January and is now reaching the mid-$7.00 range.
Viemed has been in growth mode for a while now, expanding its sales team and deepening its coverage across the US where it is currently operating in 25 states. Management is predicting to add the remaining Lower 48 states over the next year.
In late February, Viemed announced its fourth quarter and year end financials, reporting Q4 revenue of $18.5 million, a 37-per-cent year-over-year growth rate, and an EBITDA of $5 million. For the year, Viemed’s revenue per patient grew by four per cent to $12,350. (All figures in US dollars unless noted otherwise.)
Bolton says the healthcare sector is a competitive one, especially considering the US’s current political climate.
“With a lot of these [smaller] companies, they have decent growth on the revenue,” Bolton says. “Viemed has revenue growth just shy of 40 per cent year-over-year and its net income is around 24 per cent year-over-year. But it still has to spend a lot of that because it’s a very competitive space.”
“On top of that, they have the regulatory issues both here and with their clients down in the United States. And with the health care sector under pressure in the US — it was off 3.5 to 4.0 per cent [on Wednesday] — it’s a very competitive space that they’re involved in. But they’re very good at it,” he says.