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Highlights
- Well Health said its quarterly revenue grew by 395 per cent year-over-year in Q1 2022
- WELL stock climbed by over six per cent quarter-to-date
- Stocks of Sprott slumped by around four per cent in 12 months
Smallcap investing is often preferred by high-risk investors aiming for significant gains resulting from high growth exposure. When implementing this investing approach, investors typically focus on companies with small market capitalization, ranging from C$ 300 million to C$ 2 billion, that could considerably grow their market size in future, supported by sound business operations.
Let's look at two TSX smallcap stocks -- Well Health Technologies (TSX: WELL) in the health sector and Sprott (TSX: SII) in the financial sector.
Well Health Technologies Corp (TSX:WELL)
Canadian healthcare service provider Well Health said its quarterly revenue grew by 395 per cent year-over-year (YoY) to C$ 126.5 million in the first quarter of FY2022. The health service company noted that its annualized revenue run-rate was over C$ 500 million while announcing its latest quarter results.
The WELL stock climbed by over six per cent quarter-to-date (QTD), while the S&P/TSX Capped Health Care Index rose by almost four per cent during this period. According to EODHD/Others, Well Health has a Relative Strength Index (RSI) of 44.98, below the moderate level of 50. The RSI is considered an indicator of whether a stock is overbought or oversold.
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Sprott Inc (TSX:SII)
Alternative asset management firm Sprott reported total net revenues of US$ 32.27 million in Q1 2022 compared to US$ 27.54 million in Q1 2021. The financial service firm also improved its profit substantially by posting a net profit of US$ 6.47 million in the latest quarter.
The SII stock slumped by over four per cent in 12 months. EODHD/Others findings seem to show Sprott's stock to be on a bearish trend since its 52-week high of C$71.7 (April 19). Sprott’s RSI was 44.87 at the time of writing.
Bottomline
Smallcap stocks like Well and Sprott may diversify a portfolio to include the health and financial sector. Another important point is that both these companies hold a debt-to-equity ratio of less than one, which may mean lower risk. However, smallcap stocks can be volatile.
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.
