The case for telehealth is abundantly clear right now: we are going to run out of healthcare workers if we have to put every nursing assistant, nurse, and doctor who comes into contact with someone later confirmed as a COVID-19 case into a two-week quarantine. To survive this battle as a society, we literally need telehealth, telepresence, telemedicine, and robotics solutions to intervene and do at least some of the direct proximal interactive work on the front line.
The tragedy unfolding in Italy is already taking root now in New York City: a healthcare system under the rising water of a flood.
In response to the specter of this fate, the White House just announced a deregulation process for telehealth technology, dropping barriers and opening up access for providers. In response, we expect a rush of investment flows into the space as a next step, which this theme likely following what we have seen from PPE providers, vaccine and therapeutics developers, office virtualization cloud plays, and other pandemic lottery winners.
Hence, we wanted to take a closer look at three stocks that could sharply benefit from those flows over coming days, weeks, and months: Teladoc Health Inc (NYSE:TDOC), Progressive Care Inc. (OTCMKTS:RXMD), and Trxade Group Inc (NASDAQ:MEDS).
Teladoc Health Inc (NYSE:TDOC) has been an all-star performer in the telehealth thematic lottery over the past two months, and this may yet continue as the regulations drop off the map.
The stock is up a ton this year, and the vast majority of those gains have come as a product of the challenge of dealing with the COVID-19 pandemic in a healthcare system that is simply not prepared to confront the challenge without a new dimension of help.
Teladoc Health Inc (NYSE:TDOC) trumpets itself as a company that provides virtual healthcare services on a business-to-business basis in the United States and internationally.
It covers various clinical conditions, including non-critical, episodic care, chronic, and complicated cases like cancer and congestive heart failure, as well as offers telehealth solutions, expert medical services, behavioral health solutions, guidance and support, and platform and program services.
The company’s platform enables patients and providers to have an integrated smart user experience through mobile, Web, and phone based accessed points. It serves health employers, health plans, hospitals, health systems, and insurance and financial services companies. It offers its products and services under the Teladoc, Advance Medical, Best Doctors, BetterHelp, and HealthiestYou brands.
If you’re long this stock, then you’re liking how the stock has responded to the announcement. TDOC shares have been moving higher over the past week overall, pushing about 37% to the upside on above average trading volume. Shares of the stock have powered higher over the past month, rallying roughly 37% in that time on strong overall action.
Teladoc Health Inc (NYSE:TDOC) generated sales of $156.5M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 13.4% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($517.1M against $90.2M).
Progressive Care Inc. (OTCMKTS:RXMD) is another player starting to emerge as a potential telemedicine stand-out. This stock may be the most interesting in the group because shares have yet to react to the new dimension. A simple bit of research shows that RXMD shares are pricing at a discount to the traditional pharmacy space, at just 0.5x trailing 12-month sales. That’s an assumption of very sluggish growth.
And yet, the company continues to post topline growth data that is shatteringly beyond what you typically see in the pharmacy space. But more importantly, clearly doesn’t in any way take into account the telehealth services shift. We think this one is interesting because this theme – taken in concert with all other data points – suggests the potential for a really dramatic upside repricing of shares.
Progressive Care Inc (OTCMKTS:RXMD) operates a retail pharmacy that specializes in the sale of anti-retroviral medications and related patient care management; the sale and rental of durable medical equipment (DME), such as hospital beds, oxygen supplies, power wheelchairs, scooters, walkers, and other related equipment and accessories; and the supply of various prescription medications to long term care facilities.
It also provides long term care solutions to skilled nursing facilities, assisted living facilities, retirement centers and communities, doctors’ offices, and clinics. In addition, the company purchases, repackages, and dispenses prescription and non-prescription pharmaceutical products for its long term care customers.
Further, it offers computerized maintenance of patient prescription histories; third party billing; and consultant pharmacist services consisting of evaluation of monthly patient drug therapy and monitoring the institution’s drug distribution system, as well as home service and maintenance, defective product replacements, and free home installation and instruction services.
But the latest move by the company is its expansion into the telehealth space, where the scalability of growth extends by multiples, as noted above.
Progressive Care Inc (OTCMKTS:RXMD) managed to rope in revenues totaling $10.1M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 87.4%, as compared to year-ago data in comparable terms.
Trxade Group Inc (NASDAQ:MEDS) is another telehealth/telemedicine play vying for a share of the pot of gold at the end of the coronavirus rainbow. The company recently announced the onset of a new membership service by its subsidiaries Bonum Health and DelivMeds.
According to the release, “effective immediately the companies’ monthly subscription rate of $19.95 includes an option of three (3) premium visits per month as well as free prescription delivery service through its subsidiaries. Bonum Health is a virtual healthcare subsidiary that provides telehealth services and prescription ordering, via teleconferences that are routinely conducted using smart devices. They provide a (HIPPA compliant) dynamic way for patients to access board-certified physicians from the comfort of their homes or location of preference.”
Trxade Group Inc (NASDAQ:MEDS) owns and operates a business-to-business Web-based marketplace focused on the pharmaceutical industry in the United States.
It operates through Trxade, Inc.; Community Specialty Pharmacy, LLC; and Other segments.
The company operates a Web based market platform that enables commerce among healthcare buyers and sellers of pharmaceuticals, accessories, and services. Its principal products and services include Trxade.com, a Web-based pharmaceutical marketplace; InventoryRx.com, a Web-based pharmaceutical exchange platform; Pharmabayonline that provides proprietary pharmaceutical data analytics and governmental reimbursement benchmarks analysis to the United States-based independent pharmacies and pharmaceutical databases; and RxGuru, a desktop application, which provides product information.
The company also operates a retail specialty pharmacy. In addition, it operates Delivmeds.com, a consumer-based app to provide delivery of pharmaceutical products; and Trxademso.com to assist independent retail pharmacies on pricing, distribution, and logistics.
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 26% in that timeframe. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -5%. Trxade Group Inc (NASDAQ:MEDS) managed to rope in revenues totaling $2.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 172.7%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($3.4M against $956K).