Forget About Aurora Cannabis (TSX:ACB) Stock: This Proven Stock Is Heading Higher Right Now
The Motley Fool
Published May 14, 2019 14:30
Many investors get excited about the growth potential of marijuana stocks like Aurora Cannabis stock. Indeed, it has outperformed the market by appreciating about 40% in the last 12 months. However, the stock trades at a high price-to-sales ratio of close to 66. And it’s anyone’s guess if it can continue heading higher.
A new development for a proven growth stock Here’s a growth stock that analysts believe has no downside risk (only upside potential). Biosyent (TSXV:RX) stock is trading about 5% higher after it announced a meaningful development for its business yesterday — Health Canada has approved a new drug for which Biosyent has exclusive distribution rights in Canada.
That is, the drug is new to Canada but not to other countries. It has been approved and marketed in Europe for more than 30 years, and it has been approved and marketed in other countries.
As the press release stated, “Tibella [is] indicated for the short-term treatment of vasomotor symptoms due to estrogen deficiency in postmenopausal women.”
Tibella complements and enhances Biosyent’s existing portfolio of women’s health products in the company’s Community and Women’s Health Business segment, which already consists of oral iron supplements (FeraMAX 150 and FeraMAX Powder), and sodium hyaluronate suppositories (RepaGyn and Proktis-M). IQVIA estimates that the sub-segment of the women’s health market that Tibella belongs in has a market value of about $200 million.
Biosyent’s track record Biosyent is a proven growth stock. From 2013 to 2018, it has increased its revenue by 2.8 times (more than 22% per year) to $21.5 million and diluted earnings per share by three times (more than 60% per year). It has also maintained a high return on equity of 23% or greater. From 2014 to 2018, Biosyent’s EBITDA climbed more than 14% per year to $7.4 million.
While growing responsibly and profitability, Biosyent has kept the balance sheet clean with no debt and full of cash. The company’s cash and cash equivalents nearly quadrupled to $16.8 million from 2015 to 2018.
Upside potential At $8 per share, as of writing, Biosyent trades at about 20.5 times 2018 earnings and a forward price-to-earnings ratio of about 19.1.
Get The App
Buyers of Biosyent stock today can be well rewarded. Thomson Reuters has a 12-month mean target of $10 per share on the stock, which represents near-term upside potential of 25%.
Foolish takeaway Biosyent has a primary focus in Canada and is a proven profitable business that sources, acquires or in-licenses innovative pharmaceutical products, which are proven safe and effective to improve the lives of patients.
Despite the pop, the healthcare stock still looks like a good value today and can be an excellent addition to a diversified portfolio with a focus on growth .
Fool contributor Kay Ng owns shares of Biosyent Inc. Biosyent is a recommendation of Hidden Gems Canada.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2019
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.