Digital health solutions company VitalHub (VitalHub Stock Quote, Chart, News TSXV:VHI) is doing its best to pick up speed in a fractured health care records and patient care management environment.
But the company’s recent share consolidation makes it tough to apply technical analysis to the stock, says Hap Sneddon of CastleMoore Investment Counselling.
Approved last summer, VHI’s ten-to-one consolidation occurred on January 6, taking the share count down to roughly 18 million and bumping its share price from 16 cents to $1.60. But since then, the stock has seen lots of upward momentum as the company has had some positive news flow, taking VHI up into the $2.20 per share range.
Is there more upside from here? That’s tough to say, according to Sneddon.
“It’s really hard to apply any technical analysis on this. I think it’s one where you’d want to be doing fundamental analysis alone. The only thing you could say is if it breaks back over $2.20. But it’s hard to tell,” said Sneddon, president and chief portfolio manager at CastleMoore, who spoke to BNN Bloomberg on Monday.
“I’d be more concerned about this breakout which looks to be around $1.80, [but] we can’t really apply technicals there. The biggest factor I would look at is whatever fundamentals are going on with this company right now,” he said. “But when you have those reverse consolidations often those are not a good thing, historically.”
Toronto-based VitalHub is a developer of SaaS-based web, mobile and electronic record solutions and it targets organizations within the acute care, mental health, community health services and long-term care sectors. A frequent acquirer, VitalHub has expanded its product offering through six acquisitions since its reverse take-over in 2016.
The company’s latest addition was a hospital operational management solutions company Oculys Health Informatics which was closed in November 2019 for $4.2 million ($2.2 million in shares and $2.0 million in cash).
VitalHub has also picked up a number of lucrative contracts of late, including last January’s deal with the Province of Nova Scotia to license VitalHub’s Treat client management software, a contract this past October with the Tasmanian Health Service and a pair of sales this January to healthcare operators in Ontario and Manitoba.
The latest was last week’s sale of VHI’s DOCit solution, a cloud-based task management mobile app for Long Term Care providers, sold to Caressant Care Nursing and Retirement Homes, which owns and operates 15 long-term care homes and ten adjoined retirement homes across Ontario.
“We are excited to work with Caressant Care to deploy DOCit across our first multi-site DOCit customer organization,” said Dan Matlow, CEO of VitalHub, in a January 23 press release. “As we continue to grow the business, it is encouraging to see multi-site facilities recognizing the value of the individual solutions which constitute our robust suite of Health IT offerings and services. We hope that this sale to Caressant Care becomes a showcase of the power, flexibility, and accessibility of the DOCit app for other multi-site facilities.”
VitalHub last reported its quarterly earnings on November 22 where its fiscal third quarter 2019 featured revenue of $2.4 million, up from $2.1 million a year earlier, and EBITDA of $445,000, up from $156,000 a year earlier.