Strong Momentum In This Canadian Health Care Stock
Taki Tsaklanos | Apr 02, 2017 00:37
Health care is back. After a tactical bear market of 2 years it now seems that the health care sector gets capital inflows . The challenge is to find individual stocks in the sector which were outperforming during the corrective period.
One such health care stock is Savaria Corporation (TO:SIS), symbol SIS.TO, trading on the Toronto stock exchange. It is a small cap with a market cap of $500M.
Savaria provides personal mobility products: it manufactures wheelchairs, elevators, lifts, vehicles. The company has a great outlook as it sits right on the trend of an aging population. An older population suggests an increased need for mobility products. It has grown over the years not only organically but also with acquisitions.
Financials of the company are great as well. Small cap health care stock Savaria Corp has a P/E ratio of 41x, a forward P/E of 22x. The earnings per share are $0.34. The short positions are limited (short ratio 4.85%) which suggests the market believes that the rising stock price is justified. The company has only $17M of debt.
Moreover, the great outlook and financials are reflected in the chart. It is a beautiful moment chart. Although the stock price is at the higher side of the long term uptrend, it is not oversold. In other words, we see upside potential in Savaria in the short and medium. Long term, we believe the fundamentals and financials will push the stock price higher.
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