The Next Frontier: Technology in the Healthcare Space (CLOV, USAQ, AMWL, TDOC)

On its face, it is the perfect marriage of growth and value, of cyclical risk and staple economics. The marriage of technology and healthcare is a potent addition for portfolio strategists and individual investors alike.

Demand for Healthcare services is a guarantee, as the clear growth trend associated with that idea as we face an aging population in the developed world.

But our established industrial delivery system for those services is ripe for disruption. That’s where technology enters the picture.

The size and scale of the opportunity is exceptional, which is why we are likely to see increasing attention on the key players in this space, including Clover Health Investments Corp (NASDAQ:CLOV), USA Equities Corp (OTCMKTS:USAQ), American Well Corp (NYSE:AMWL), and Teladoc Health Inc (NYSE:TDOC).

 

Clover Health Investments Corp (NASDAQ:CLOV) bills itself as a company that operates as a Medicare Advantage insurer in the United States. But it is also seen as an innovative technology company committed to improving health equity for America’s underserved seniors.

The company through its software platform provides preferred provider organization and health maintenance organization health plans for Medicare-eligible consumers.

Clover Health Investments Corp (NASDAQ:CLOV) most recently announced the hiring of South Fulton City Councilwoman Carmalitha Gumbs to lead the company’s community organizing efforts and partnership development in Metro Atlanta, and throughout the southeast region to include Georgia, South Carolina (Charleston), and Mississippi (Jackson).

“We are delighted to welcome Carm to the Clover family. She brings invaluable experience serving local communities in Georgia and has spearheaded a number of initiatives to increase access to quality services for the Medicare population in the area,” said Chief Executive Officer Vivek Garipalli. “Improving health equity is core to our foundation, and Carm has a profound understanding of the needs of senior communities throughout the state.”

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action CLOV shareholders really want to see.

Clover Health Investments Corp (NASDAQ:CLOV) shares have been pulling back. In total, over the past five days, shares of the stock have dropped by roughly -23% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.

 

USA Equities Corp (OTCMKTS:USAQ) shares have potentially started to break out over recent days from an extended technically bullish pattern (“bullish ascending triangle” as it is known by market technicians). This follows recent positive news.

The company engages in the provision of medical device technology and software as a services. It focuses on enabling primary care physicians to increase their revenues by providing them with relevant, value-based tools to evaluate, and treat chronic disease through reimbursable procedures. Its products will enable physicians to diagnose and treat patients with chronic diseases which they historically have referred to specialists.

The company’s near-term objective is to acquire five thousand physicians by 2023, which would generate $17.9 million on the topline. According to its materials, all current and future products and services will be sold through the same distribution channel and customer base allowing it to generate additional revenue without the customer acquisition cost.

USA Equities Corp (OTCMKTS:USAQ) most recently announced it has entered into a co-promotion agreement with ENP Network, the largest web-based services provider to the nurse practitioner (NP) community and nurse practitioner associations with over 260,000 members.

ENP Network will provide marketing and advertising support focused on the 27,843 sole proprietor nurse practitioners in its network. The products covered by this agreement include AllergiEnd’s allergy diagnostic and allergen immunotherapy products and the upcoming University of Miami’s Miller School of Medicine Allergy Diagnostics and Allergen Immunotherapy Virtual CME event on June 26, 2021.

USA Equities Corp (OTCMKTS:USAQ) is projecting entry level monthly subscriptions will be $299/month or $3,588 per year. Its near-term projection is to acquire 5,000 physician clients by the end of 2023 and over 20,000 physicians in the medium to longer term, which is still less than five percent of the total target physician audience in the US today.

According to the Journal of Pharma and Healthcare: “There are over 450,000 primary care physicians, including licensed nurse practitioners, in the United States.” With a range between $3,588 – $10,000 per physician per year, USAQ is targeting an addressable annual market of roughly $1.6 billion. Capturing just 5% of this market would generate revenue of at least $87 million.

 

American Well Corp (NYSE:AMWL) trumpets itself as a leading telehealth platform in the United States and globally, connecting and enabling providers, insurers, patients, and innovators to deliver greater access to more affordable, higher quality care. Amwell believes that digital care delivery will transform healthcare.

The Company offers a single, comprehensive platform to support all telehealth needs from urgent to acute and post-acute care, as well as chronic care management and healthy living. With over a decade of experience, Amwell powers telehealth solutions for over 2,000 hospitals and 55 health plan partners with over 36,000 employers, covering over 80 million lives.

American Well Corp (NYSE:AMWL) most recently announced financial results for the first quarter ended March 31, 2021, including total active providers of approximately 81,000 at the end of the first quarter increased 240% compared to a year ago and total visits of 1.6 million in the first quarter increased 120% compared to a year ago.

“Our first quarter results represent a strong start to the year and demonstrate continued momentum across our business. As telehealth evolved from a complimentary service to a fundamental enabler of mainstream healthcare, we too have advanced our innovation and investment strategy: our next generation platform Converge is designed to enable healthcare’s most trusted players to carry out digitally empowered, full-spectrum, unified online and in-person care. At its core, we believe Converge offers exceptional usability, reliability, scalability and flexibility. With its modular open architecture and longitudinal capabilities, we believe Converge will simplify innovative collaboration across the ecosystem. We expect Converge to expand our market opportunity and enhance our own efficiencies over time. We also expect it to accelerate innovators’ ability to impact clinical and financial outcomes by creating a faster path to implement new technologies and services in a single integrated platform,” said Dr. Ido Schoenberg, Chairman and Co-CEO.

Even with that news, the action hasn’t really heated up in the stock, with shares moving net sideways over the past week.

American Well Corp (NYSE:AMWL) pulled in sales of $57.6M in its last reported quarterly financials, representing top line growth of 7.2%.

 

Teladoc Health Inc (NYSE:TDOC) 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. Its platform enables patients and providers to have an integrated smart user experience through mobile, Web, and phone based accessed points.

This is one of the core plays in the space at this point given its prior commitment to the Telehealth revolution ahead of the advent of the pandemic.

Teladoc Health Inc (NYSE:TDOC) most recently announced the launch of myStrength Complete, an integrated mental health service providing personalized, targeted care to consumers in a single, comprehensive experience. The announcement comes as more than half of people with mental health concerns report that they do not know where to start when getting care, highlighting the importance of the digital front door myStrength Complete will provide.

“We are connecting the full range of mental health services from apps to clinicians so that people can access timely help, tailored to their needs and on their terms,” said David Sides, chief operating officer at Teladoc Health. “myStrength Complete meets the dual consumer needs of comprehensive mental health care and a simplified experience in one service – developed through the integration of Teladoc Health and Livongo.”

Even in light of this news, TDOC hasn’t really done much of anything over the past week, with shares logging no net movement over that period.

Teladoc Health Inc (NYSE:TDOC) managed to rope in revenues totaling $453.7M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 150.9%, 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 ($722.6M against $260.4M).

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Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).