With small-cap season kicking off, we wanted to bring you a stock idea that’s a little different than our usual recommendations. Healwell AI Inc. (HWAIF) is a very early-stage company, but it is moving fast and is supported by a seasoned team and a large Canadian healthcare company, explains Jeff Hirsch, editor-in-chief of The Stock Trader’s Almanac.
While much of the push to improve corporate efficiency and productivity with AI is being driven and run by Palantir Technologies Inc. (PLTR), organizing and mining through the maze and mess of medical records and patient data is not being done on a major scale as far as we know. This is where Healwell AI comes in.
Their mission is to improve healthcare through early identification and detection of disease using its suite of AI co-pilots to detect rare and chronic diseases and improve diagnostic and treatment efficiency. The company’s main stock listing is in Canada on the Toronto Stock Exchange under the ticker AIDX. The US listing is on the OTCQX, which is the top tier of the over-the-counter market, a step above the bulletin board and the pink sheets.
The company is planning to list the stock on a major US market in the near future, likely Nasdaq. Including all stock options, convertible debentures, and warrants, Healwell had a fully diluted market cap of about $379.8 million at the recent closing price of $1.45.
The company has been built through a strategic merger and acquisition strategy and is aggressively continuing to pursue that. This is the same strategy the co-founder and chairman perfected at WELL Health Technologies, a multichannel digital health technology company and Canada's largest owner and operator of outpatient health clinics. WELL Health is the company’s strategic partner.
Healwell is on pace to be at an annual run-rate of $75 million in revenue by the end of 2024 and is committed to profitability in 2025. The company has a two-pronged growth strategy:
1. To increase its AI capabilities through strategic technology acquisitions like the deal announced recently to acquire a controlling interest in Mutuo Health Solutions for cash and stock. Mutuo has a remarkable AI-scribe technology, AutoScribe, that transcribes clinician-patient dialogue into structured electronic medical records (EMR) data in real-time using machine learning (ML) and natural language processing (NLP).
2. To acquire or partner with major healthcare companies to grow their database of doctors and patient data. The company is currently working on closing a potentially transformational deal in this space with a mature healthcare software and research operation.
Remember: This stock is early stage and until recently relatively unknown. So, trade it carefully within your risk/reward profile with sensibly sized positions.
Disclosure note: I hold a position in Healwell AI Inc.
