- Investors often chose to invest in low-priced stocks in the healthcare sector, as few of such firms will emerge as big gainers in the long term.
- Events such as successful research attempts or a new drug launch are expected to boost the stock price multi-folds, thus serving as an attractive opportunity for investors.
The low prices of shares is an attractive opportunity for investors who have limited funds but still want to make big in the stock market. Shares that trade at low prices usually are referred to as penny stocks and have very low market capitalisation. The investor tries to acquire a large number of these low-priced shares with the intention to gain a higher return on investment. Investors who are seeking to reap huge benefits from low price stocks need to invest in the company right from the initial stages of its growth. Nevertheless, penny stocks are often considered speculative, highly risky due to lack of liquidity, comprise a smaller shareholder base, and limited information disclosure. These stocks are more prone to scams and may be difficult to determine if the spike in share price is manipulated or genuine. Therefore, investors are recommended to be careful while investing in such low-priced stocks and conduct proper due diligence investing in these stocks.
Investors often chose to invest in low-priced stocks in the healthcare sector as well, as few of such firms will emerge as big gainers in the long term. However, the fast-changing and dynamic nature of the healthcare business that is often research-based makes the market performance of these companies very uncertain. Consequently, their stocks may be trading at lower prices. Events such as successful research attempts or a new drug launch are expected to boost the stock price multi-folds - A major reason for investors to bet on such low-priced healthcare stocks.
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Here are five penny healthcare stocks. These are not recommendations to buy or sell, but a general analysis talking about different healthcare stocks.
Polarean Imaging Plc (LON: POLX)
The shares of the AIM-listed point-of-care firm are priced at GBX 86.00 and have a one-year return of 181.94 per cent as of 10:36 AM 28 July 2021. The shares have a market capitalisation of £176.67 million.
Polarean Imaging’s gross revenues were £8.4 million for the year ended 31 December 2020, which included a £2.2 million subscription from the company’s new strategic investor Bracco Imaging S.p.A. (Bracco). It boasts of positive results due to the successful Phase III clinical trials using hyperpolarised 129Xenon gas. However, the company has stated that its revenues in 2020 were slightly below expected levels. In 2021, Polarean received funding of £27 million in oversubscribed financing deal that will fund commercialisation and launch programmes and enable follow-on trials and market exploration.
EKF Diagnostics Holdings Plc (LON: EKF)
The shares of the point-of-care diagnostic and central laboratory assay manufacturing firm are priced at GBX 76.20 and have a one-year return of 55.06 per cent as of 10.38 AM 28 July 2021. The shares have a market capitalisation of £346.70 million.
EKF Diagnostics Holdings reported solid trading results from the start of the year to Q2 2021, reflecting strong growth in demand for the company’s contract manufacturing services for COVID-19 sample collection devices and associated kits.
Company revenues for the six months ended 30 June 2021 were £38.56 million compared to £26.33 million in the same period last year. As a result, it expects to report an adjusted EBITDA of £12.75 million for the period (H1 2020: £8.93 million). Gross cash and cash net of borrowing stood at £20.78 million and £20.39 million, respectively, as of 30 June 2021.
Induction Healthcare Group Plc (LON: INHC)
A UK-based health IT company’s shares are priced at GBX 68.00 as of 10:40 AM, 28 July 2021. The shares have a market capitalisation of £62.59 million.
The company caters to over 225,000 hospital doctors in the UK, Australia, Ireland, and South Africa. On 20 July 2021, Induction announced contract renewal of NHS Wales with Attend Anywhere for £1.635 million.
Induction acquired Attend Anywhere in June to strengthen its flexible care technology products for patients and healthcare professionals. The contract will enable the generation of revenues to the tune of £1.22 million in the year ending 31 March 2022. For the six months ended 30 September 2020, the company reported solid sales and Annual Recurring Revenue (ARR) run rate across its subscription-based software products, with Group’s revenues reaching £0.6 million.
Trellus Health Plc (LON: TRLS)
Trellus Health Plc is a provider of commercial scientific, resilience-based, and connected health solutions for chronic condition management. The shares of the firm are priced at GBX 69.00 as of 10:40 AM on 28 July 2021. The shares have a market capitalisation of £111.42 million.
On 20 May 2021, Trellus Health was admitted for trading on AIM.
The company was successful in generating fundraising for gross proceeds valuing £28.5 million. It aims to offer expert-driven, personalised care for people with chronic conditions, provide personalised interdisciplinary care to enhance the quality of care, and significantly lower unplanned care events and their associated costs. To achieve these objectives, the company intends to collaborate with customers, including health plans and self-insured employers, to bring annual cost savings in the order of 20 per cent.
Omega Diagnostics Group Plc (LON: ODX)
Omega Diagnostics Group is a medical diagnostics firm focused on testing CD4, infectious diseases, and food sensitivity. Omega provides high-quality in-vitro diagnostic products for clinics, hospitals, healthcare practitioners, and laboratories across 75 countries. The shares of the company are priced at GBX 52.00 as of 10:42 AM 28 July 2021. The shares have a market capitalisation of £94.06 million.
For the year ended 31 March 2021, the company reported 11 per cent year-on-year decrease in revenue to £8.73 million compared to £9.82 million in 2020. It reported an EBITDA loss of £2.20 million (2020: £0.89 million profit). In the coming months, the company aims to deliver high-value instrument-free diagnostic products, roll out a new range of lateral flow tests for immune system diseases. Amidst the pandemic, the company’s COVID-19 antigen testing continues to remain a key growth opportunity.