BLU, VMD, FRX, CPH & TH: 5 TSX healthcare stocks beating the odds

Highlights

• The S&P/TSX Capped Health Care Index has lost 26 per cent year-to-date (YTD)
• About 15.6 per cent of Canadians were aged 65 years and older in 2014 and this number is expected to surge by over 50 per cent come 2030
• Some investors look at Canada’s healthcare sector with a view that it is only inevitable that revenues will increase given the age demographics of the country

The healthcare sector was catapulted into the limelight with the onset of the Covid-19 pandemic as they rushed to come up and win approval to various solutions to deal with the virus.

However, now it seems like the pandemic is all but receded and reportedly, even leaders in Shanghai are convinced the outbreak is near to being contained.

Like most other sectors, 2022 has not gone well for Canadian healthcare stocks. Currently, the S&P/TSX Capped Health Care Index has lost 26 per cent year-to-date (YTD).

That said, Canada is an aging country, and its citizens will need medical care as well as meds. Canada has one of the best life expectancies in the world and it keeps increasing.

About 15.6 per cent of Canadians were aged 65 years and older in 2014 and this number is expected to surge by 50 per cent come 2030. So, let us look at some TSX-listed healthcare stocks that are beating the odds in this bearish phase.

BELLUS Health Inc (TSX:BLU)

BLU closed the trading session Thursday, May 5, at C$10.72. The stock’s gain so far in 2022 is 5.4 per cent, but over nine months it has gained 174 per cent.

Furthermore, it is up 24 per cent in the last three months including 4.5 per cent over the last week.

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Viemed Healthcare Inc (TSX:VMD)

The stock of Viemed closed out Thursday at C$7.02 and it is up 6.4 per cent on a YTD basis. Over the last 12 months it has lost 41 per cent.

But in the more near past, it has been gaining. It’s 52-week low came on March 7 when it touched C$4.53 at which point it was likely undervalued.

The stock is up 22 per cent in three months and about eight per cent in the last week alone. Its price-to-earnings ratio is 24.8.

The price-to-earnings (P/E) ratio indicates how much an investor is paying for every dollar of earnings generated.

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Fennec Pharmaceuticals Inc (TSX:FRX)

FRX at market close Thursday stood at C$7.50. It is up 34 per cent YTD and 27 per cent of that came in the last three months.

The stock experienced a sudden fall in November 2021 when it fell over 76 per cent in four days and so can be said to have experienced volatility.

However, so far this year its trajectory has generally been upward, recovering from that, and currently, it is in the green compared to 12 months ago by 0.67 per cent.

Cipher Pharmaceuticals Inc (TSX:CPH)

CPH closed Thursday at C$2.36. It has risen 33 per cent this year of which 31 per cent has come in the last month and about eight per cent in the last week.

Over the last year, it has gained 65 per cent, its one-year low of C$1.27 coming way back on May 12, 2021.

It has the best P/E ratio of this lot and that currently stands at 6.7.

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Theratechnologies Inc (TSX:TH)

TH is the only stock here that is in the red YTD as well as over the past three months. TH has lost 18 per cent this year and 21.7 per cent over the last three months.

However, it is featured on this list because it has zoomed about six per cent in the last week. It closed the day Thursday at C$3.13 after having rebounded about 18 per cent from its 52-week low of C$2.66 on May 2.

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Bottom line

Some of these companies are experiencing losses which is why their P/E ratios are in negative territory. But loss quarters can happen with clinical-stage companies before their therapy, technology or drug is approved.

Many investors look at Canada’s healthcare sector with a view that it is only inevitable that revenues will increase given the age demographics of the country. Such an approach would suggest a mid- to long-term strategy.

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Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.