Companies with strong business model have navigated well during the pandemic times. From pruning costs to mergers and consolidations, these firms have left no stone unturned to enter profitable terrains while expanding revenues.
Here are the two promising companies with strong fundamentals and business deliverable that has the potential to grow big in coming days.
Enthusiast Gaming Holdings Inc. (TSX: EGLX)
Video games and esports company Enthusiast Gaming Holdings Inc (EGLX) reaches out to 300 million players each month via its platform. It provides unparalleled access to millennials across segments and has built an extensive community of fan base over the years.
The stock closed at C$ 6.35 on Jul 20, 2021. The gaming scrip is trading nearly 48.38 per cent below its 52-week high of C$ 11 (April 21, 2021). It has returned 255 per cent in nine months and nearly 250 per cent in one year.
In the first quarter of this year (Q1 FY2021), Enthusiast posted total revenue of C$ 30 million, up a massive 321 per cent year-over-year (YOY) from C$7.1 million. The rise in sales was due to the increase paid viewership, which grew by 49 per cent to 137,000 by the end of March 31, 2021.
Despite a gross profit of C$ 5.9 million, the company posted a net loss of C$ 13.6 million due to increase in advertisement spends and payment of outstanding debentures.
The company has a market cap of C$ 808.44 million and 124.75 million outstanding shares.
Why Enthusiast (TSX: EGLX) stock can double
The pandemic-induced lockdowns impacted the performance of the company last year.
However, the company recent announced strategic deals with Samsung and TikTok and has also acquired Vedatis SAS – owner of Icy Veins, a guide platform for Activision Blizzard games. The management believes that these acquisitions and investment deals will drive long term revenue and margin growth.
It also plans to launch a subscription-based gaming network and other premium gaming subscription model, which will further help the brand to evolve into a technology driven esports and media company.
Andlauer Healthcare Group Inc (TSX: AND)
Andlauer healthcare Group (AND) is a leading healthcare supply chain company offering customized logistics support to its clients. The company has dedicated delivery, freight and ground transport segments for healthcare transporation.
The company has a market cap C$ 566.58 million of and 13.37 million outstanding shares
AND stock last traded at a price of C$ 42.36, nearly 15 per cent below its 52-week high of C$ 50 (November 09, 2020) and 33 per cent above its 52-week low of C$ 31.81 (January 29, 2021).
The scrip jumped up by 17 per cent nearly over six month.
Its revenue increased by 17.3 per cent YoY to C$ 95.8 million in Q1 FY2021. The specialized transportation business supplied COVID 19 vaccines and other ancillary products to the Canadian government, which drove the revenue, as per management's commentary
The net income stands at C$ 11.6 million in Q1 FY2021 compared to C$ 8.2 million in Q1 FY2020, up by 41.9 per cent.
On the valuation metrics, the company holds a positive return on assets (ROA) of 13.14 per cent and the return of equity (ROE) is 41.63 per cent. The EPS is 1.10, and price-to-earnings (P/E) stands at 38.50 times.
On July 15, 2021, the investors of the company were paid a dividend of C$ 0.05. Normally, dividends are paid every quarter. The latest dividend yield was 0.472 per cent.
Why Andlauer (TSX: AND) stock can double
The logistics and distribution business of the company delivered exceptional results in Q1 FY2021 and has benefitted from the strong growth coming from the air-freight and last mile delivery services.
The company acquired TDS Logistics, McAllister Courier and Skelton, which led to an increase of 7.7 per cent in revenue in the healthcare logistics segment in Q1 FY2021, as per the Q1 FY2021 press release.
With greater product and service volumes, greater storage and handling activities, the company has the potential to grow. It is already supporting Canadian government combat COVID 19 by acting as a logistics partner.