One of the advantages retail investors have over their institutional competitors is the ability to search the hidden corners of the market for investment opportunities. Information is now available to anyone with an Internet connection. So if you are ready to invest your time, you might find something interesting.
While popular tech stocks get a lot of wall street attention, there is a fantastic one Small cap stocks that absolutely outperformed the market, almost quadrupling in 2021. And business is booming.
is The common corp. (NASDAQ: JYNT) the best stock for under $ 110?
Riding in the wellness madness
The company’s business model is simple and straightforward. The Joint Corp. is an operator and franchisor of low cost chiropractic clinics in the United States. The average cost of a session is $ 29, far less than most traditional chiropractors.
This is because the business only offers basic back adjustments, and thus attracts people who are new to chiropractic. And it eliminates the need for expensive equipment and administrative staff. No insurance or an appointment is required.
As of June 30, The Joint Corp. 633 clinics in its system, more than double the number at the end of 2015. Revenue rose 61% in the most recent quarter, while revenue in the same store rose 53%. The three-month operating income of $ 2 million is a long way from the $ 259,000 in Q2 2020. These are remarkable numbers that underscore the growing public interest in non-invasive health and wellness.
Management was so impressed with the quarter that it raised its forecast for sales, profits, and store openings for 2021. It appears that The Joint Corp. is well on the way to achieving its goal of 1,000 clinics by the end of 2023.
this Health company operates in a highly fragmented domestic chiropractic market valued at $ 18 billion. The chain’s system-wide revenue of $ 260 million in 2020 represented just over 1% of the total industry, leaving plenty of room for expansion in the years to come.
But consider the rating
As a result of outstanding execution – opening more clinics, increasing sales further, it’s no surprise that this under-the-radar stock has seen such a massive price hike. I got The Joint Corp. first viewed in January this year and ultimately found the stock’s performance outperforming underlying fundamentals. I couldn’t have been more wrong.
Not only did I underestimate the company’s ability to recover from the pandemic, I underestimated how much the market would appreciate fundamentals. As a result, I missed a big winner.
W.I’m still on the sidelines here. Again, the execution speaks for itself and the long-term outlook couldn’t be better. But I think investors who buy stocks now are just hunting for returns right now. Not to mention, the stock is selling at a price-to-sales ratio of 24, its highest ever; it is even higher than that of electric vehicle manufacturers Tesla.
The Joint Corp. is certainly a hot stock. I think the best move now is to put it on your watchlist and wait for a significant withdrawal.
This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.