5 Best Telemedicine Stocks to Buy Now

3. Change Healthcare, Inc. (NASDAQ:CHNG)

No of HFs: 49

Total Value of HF Holdings: $1.36 Billion

Change Healthcare, Inc. ranks as the third-best telemedicine stock to buy now. The company offers a catalyst for value-based healthcare systems. During the fiscal 2020 fourth quarter, the company reported total revenue of $843.4 million. An insider recently purchased 100,000 shares at around $12. The stock increased by 50% since then.

In an article, Greenlight Capital Fund mentioned their comments on the stock.

“We initiated a large long position in Change Healthcare (CHNG). CHNG is a healthcare technology company that owns the largest medical claims clearinghouse network and several leading software platforms. For years, we were short athenahealth, which promoted itself as the “backbone of the healthcare internet.” That label is more aptly applied to CHNG.

While similar healthcare assets trade for over 20x free cash flow, we were able to acquire our stake in CHNG for $11.40, or 9x our estimated free cash flow. Until recently, McKesson’s large retained ownership of the company rendered the stock less liquid, with an available float of under $1 billion and less than one quarter of all outstanding shares. We believe this limited investor interest in the new company. In February, McKesson announced an exchange offer that increased CHNG’s public float by more than 3x, making the company investable to a much broader range of potential shareholders.

The company has not shown meaningful top-line growth recently. We believe growth in the company’s core businesses has been obfuscated by several one-time factors including planned contract eliminations, the rollout of a new imaging platform, and the shift to ASC 606 accounting standards. With these events now behind the company, we expect solid growth in the coming years with the resumption of elective surgeries. CHNG shares ended the quarter at $9.99.

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