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Small-Cap Stock Performers: Progressive Care’s RXMD Still Leading the Pack

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Small-Cap Stock Performers: Progressive Care’s RXMD Still Leading the Pack

As the broader market starts to show evidence of topping-out, many investors have switched to small-cap alternatives are a potential driver of portfolio growth.

One of the names that continues to stand out from the pack is South Florida healthcare services and technology company Progressive Care, Inc. (OTCMKTS: RXMD), which has attracted a great deal of attention after the stock saw a price spike of 1,150% in the the period spanning from February to March. Valuations jumped from $0.02 in January to $0.25 in March 2018 – and this has helped the stock’s post rallies of 250% year-to-date.

It almost goes without saying but this means that RXMD has strongly outperformed the market (as the S&P 500 is showing gains of only 2% for this year). But can these impressive trends continue? Here, we will look at some of the factors driving growth for Progressive Care and its businesses.

RXMD Stock Performance Overview

One of the central reasons RXMD stock has gained so much attention (and its increase in trading volume) has been the rise in prescriptions filled during the first-quarter of this year. For the period, Progressive Care reported an increase of 24% in prescriptions filled (on an annualized basis). In February alone, the company filled $470,000 in prescriptions and generated fees of $20,000 (which was a 200% gain relative to the year-ago figure). These are stellar gains, no matter how you view the numbers.

RXMD Healthcare stock
RXMD Healthcare stock
However, in April 2018, shares came tumbling down, losing 65% (to $0.08) on security concerns related to Progressive’s website. This event, along with speculation of insider selling by its funding partner Chicago Venture Partners put the stock back near pre-breakout levels. But share prices have stabilized after both concerns were addressed by Progressive Care CEO S. Parikh Mars via an open to letter to the shareholders (which confronted the negative reports). RXMD rebounded after the announcements were made.

RXMD Financial Outlook

RXMD performed well during the quarter ending March 31st, 2018. Revenues came in at $1.9 million (which was the largest revenue generation in any single month in the company’s history). Net revenues of $5 million were an increase of 7.36% from the year-ago period. Overall, the revenue figures have jumped from $9 million in 2013 to $20 million in 2017. This is an impressive performance for a company with only 50 employees.

RXMD filled in 64,000 prescriptions in Q1 2018, and the company’s total assets have increased by 49% relative to Q1 2017. Operating cash flow went from $-8,641 to a whopping $309,827 (+3,000%) for the period. These numbers have created a healthy balance sheet – and this shows the stock is set to bring in massive yields for its shareholders.

Progressive Care is currently licensed in 10 states, with more licenses currently in progress. This is clear evidence that the company is continuing to build its brand and build on its prior accomplishments. In December 2017, RXMD was listed on the OTCQB – and there is scope for the stock to be listed on the NASDAQ in the future. With its subsidiaries Smart Medical Alliance, Inc. and PharmCo, LLC, RXMD now stands strong with its four central pillars:

  • Expertise in healthcare
  • Patient care
  • Pharmaceutical management
  • Customer service

The recent quarter was a momentous period due to the following achievements:

  • Introduction of Bitcoin to its payment platform
  • Record-breaking numbers in terms of its financial strength
  • Plans made to acquire Touchpoint RX pharmacy in Palm Beach County
  • Price target upgraded to $0.35 per share by the investor analyst SeeThruEquity

For 2018, RXMD has set a revenue goal of $22 million along with monthly prescription numbers of 25,000. With its current market capitalization of $35 million and a substantial cash balance, RXMD is set to become a favored growth stock for prudent investors.

Rising Industry Sectors

For investors looking to gain entry into the rising healthcare industry, it looks likely that Progressive Care’s RXMD will continue leading the pack. The level of momentum that has been present in the stock is rare, as there are not many industry sectors that can reasonably expect to grow more than 300% in the next few years.  

Great potential for growth in this sector comes from the fact that regulatory approval processes has been streamlined over the last few years. Many states are considering taking things in this direction, and this has made sales predictions increasingly optimistic for the company. Throughout the sector as a whole, RXMD remains attractive given its growth prospects and recent pullback to pre-breakout levels. For these reasons, the stock looks likely to gain on its bullish momentum in the months ahead.

Dividend Stocks, S&P 500

Time to add Johnson & Johnson to your Portfolio as Sales Projected to Grow despite Headwinds

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Johnson & Johnson (NYSE: JNJ), the global healthcare behemoth, posted Q4 2017 revenue of $20.2bn (an increase of 11.5%) and 2017 full-year earnings of $76.5bn (an increase of 6.3%) on January 23, 2018. Diluted loss per share was $3.99 (adjusted diluted EPS was $1.74 which was an increase of 10.1% compared to Q4 2016); while diluted EPS for 2017 full-year was $0.47 (adjusted diluted EPS was $7.36 which was an increase of 8.5%). The decrease was primarily due to the provisional charge of $13.6bn which was incurred due to the Republican tax reform. Free cash flow in 2017 was $17.8bn.

Source: Yahoo Finance

Exceeding the expectations set at the beginning of 2017, Johnson & Johnson also gave a total shareholder return of 24% with its Pharmaceutical business and Medical Device business showing great strengths. During 2017, it completed around 60 acquisitions and invested $10.5bn in R&D and $35bn in Mergers & Acquisitions. It also executed four divestitures as a part of its business fortification strategy.

Investment Outlook

Source: Google Finance

As the above chart shows, the J&J stock rallied to all-time highs of $147 in January 2018 before falling down 13% to around $127 in March 2018. It went to its highs during 2017 due to its product launches, positive clinical data, and strong Q3 2017 results. However, it declined by 13% in February 2018 due to the following reasons:

  • Q4 2017 results showed negative earnings due to the tax reform act
  • Sales decline in some of its drugs, baby care division, and specialty surgery
  • Talcum powder lawsuits since last year

As per the latest survey by Reuters, J&J stock has received a ‘buy’ or ‘strong buy’ rating from 52% of its analysts and a ‘hold’ rating from 35% of them.

However, looking toward 2018, Johnson & Johnson stock can be seen as a good investment for prospective shareholders due to the following reasons:

  1. With $10.5bn investment in Research & Development, J&J would also be tapping on the developing markets across the world.
  2. J&J’s forward price to earnings ratio is 18.5, lesser than the S&P 500 stock ratio, which makes it a good quality buy.
  3. With a presence in over 60 countries and a massive healthcare division, J&J is uniquely positioned to gain from economies of scale.

Dividend Outlook

As a Dividend Aristocrat, J&J has raised its dividend for consecutive 55 years and now has a yield of 2.5%. The dividend payout ratio stands at around 60%. In 2017, it spent $8.9bn in dividends – i.e. 50% of its free cash flow of $17.8bn. It paid its latest dividend of $0.84 on March 13, 2018. The 5% annual dividend increase for 2017 is low compared to the last eight years (last two annual increases were 6.7% in 2016 and 7.1% in 2015).

Even though J&J is using its cash flow to improve shareholder value, it is also being prudent with the way it manages its finances. Looking at the string of mergers and acquisitions conducted over the past few years, it seems that it would be offsetting these costs by balancing its dividend payout. This could be a reason for a decrease in annual dividend growth. However, all in all, its robust dividend payout despite the future challenges makes it a reliable stock in a prudent investor’s portfolio.

How Does JNJ Stock Compare with the Top Healthcare stocks in the Dow Jones U.S. Health Care Index (DJUSHC)?