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Andlauer Healthcare Group Inc. (TSX: AND) is a Canada-based company that provides healthcare supply chain services. The Company offers a platform of customized third-party logistics (3PL) and transportation solutions for the healthcare sector.
Key highlights
Risks associated with investment
The company may see an increase in absenteeism from operational workers, such as warehouse associates, drivers, and owner operators, as a result of the pandemic, which might have a detrimental impact on operations. Furthermore, the entry of a new competitor into the business causes stiff rivalry and shifts in customer preferences may result in a loss of market share, affecting the company's revenue and cash flow.
Financial Overview of Q1 2022 (In thousands of CAD)
Top-5 Shareholders
The top 5 shareholders are illustrated in the pie chart below, which forms around 35.09% of the total shareholding. Mawer Investment Management Ltd. and BMO Asset Management Inc. hold the company's maximum interests at 9.95% and 7.80%, respectively. The company's institutional ownership stood at 59.10%. Higher institutional holding boosts the confidence in the mind of retail investors.
Valuation Methodology (Illustrative): EV to Sales
Stock recommendation
The company's impressive first-quarter financial performance, which included year-over-year gains in sales and EBITDA of more than 50%, highlights the considerable effect of the acquisitions in 2021 as well as continuous organic growth. In the first quarter, the firm continues to develop its acquisition plans with the purchase of LSU, which expands the healthcare logistics product portfolio and market presence in Quebec. These high statistics contributed to the company's strong cash flows of CAD 29.3 million in Q1 2022, compared to CAD 16.8 million in pcp, which is a huge improvement.
The company is expanding its presence in the United States, which is a significant plus. On the cost front, the firm is focusing on operational excellence and has reduced its operating expenditures as a percentage of sales by 130 basis points, which is a significant improvement. Furthermore, the outsourced healthcare logistics and transportation business in North America is expanding at a solid rate, boosting the company's confidence. Therefore, based on the above rationales and valuation, we recommend a "Buy" rating on the stock at the at the last closing price of CAD 39.63 as on June 15, 2022.
One-Year Technical Price Chart (as on June 15, 2022). Source: REFINITIV, Analysis by Kalkine Group
*Recommendation is valid on May 16, 2022, price as well.
Technical Analysis Summary
Disclaimer
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