Telehealth care Industry: Reincarnation of Healthcare

The Corona Virus pandemic has changed the life we used to live. Things are not similar anymore. Several industries and companies have been drastically impacted. Companies and industries have been trying to cope up with various business models to sustain in this economy. Industries like Airlines, Restaurant, and hotels industry have suffered the most due to new norms of living of social distancing and cross-country restrictions. But the industry which is under huge pressure to serve under these new-normal conditions is Healthcare. This industry has gone through a lot of changes. US Healthcare system has acquired new ways to treat patients with proper medical facilities. At the beginning of this pandemic, the US Healthcare system was at its break, we even saw new headline Hospitals shutting their doors as they were unable to treat the huge number of patient footfalls in hospitals and other small clinics. Doctors are finding new alternatives to treat their patients. People are still falling sick not only due to Covid-19 but also due to various other diseases or injuries. Doctors are now broadly using Telehealth care/ Telemedicine services to treat their patients. This term can be defined as “Use of electronic communications and software to monitor and treat patients without patient’s visit”.

According to IBIS World research suggested that the Telehealth services had grown 34.7% annually from the period of 2014-2019. The market size in 2019 was $45B and it is projected to grow by $175B by 2026. Despite an increase in revenue in this segment Americans were not quite using the service until the novel coronavirus pandemic hit in early 2020. But now doctors suggest more patients visit the telehealth care services more, for example, if 20 patients are visiting the clinic, 50-60 patients are taking the telehealth care service. So, we see a major change in consumer mindset where social distancing is a new norm of our normal life. Patients are more willing to opt for the telehealth service and Hospitals and Healthcare companies are adopting this service which is making changes in their way of treating and monitoring the patients and ensuring the safety measures.  

US Government is also encouraging the service as in March it decided that users can opt for this service without any extra cost and private health insurers also have to settle in full. This gives a boost to this industry as well. Major tech companies are partnering with various healthcare companies to provide necessary services to both users and companies eventually boosting this industry.  There are various companies which can get benefited from all these factors, this is a major shift in the Healthcare industry, and companies benefitting the most are Teladoc (NYSE: TDOC); American Well (Amwell) Healthcare company. 

Teladoc Healthcare, Inc 

Teladoc Health, Inc. provides virtual healthcare services on a business-to-business basis in the United States and internationally. It covers various clinical conditions, including non-critical, episodic care, chronic, and complicated cases like cancer and congestive heart failure, as well as offers telehealth solutions, expert medical services, behavioral health solutions, guidance and support, and platform and program services. The company’s platform enables patients and providers to have an integrated smart user experience through mobile, Web, and phone-based accessed points. The company revenue has grown quite significantly over the past few years, which is shown below:

Though the company is still not making its profits yet there is huge potential to grow, seeing the revenue growth. The company’s EBDITA has also improved form ($62,848) in 2016 to ($35,490) in 2019, we could see the company reporting its profit by end of the year 2021. We are expecting the company to perform well given the current situation and the change in our mindsets. We except the stock to perform well as soon the company starts making profits, so we may see a huge upside rally. An investor can buy this stock for the long term with Buy and Hold strategy. [Credit Suisse has given a good rating in its reports Top Ten Companies to invest in 2020].

American Well (AMWELL) Healthcare

Similar to Teladoc, Amwell is also is into telehealth services. It is a privately held telemedicine company based in Boston. The company operates in all 50 U.S. states and works with 55 health plans, which support over 36,000 employers and collectively represent more than 80 million covered lives. Amwell raised $500M till now and is planning to raise $560M through IPO. According to S-1 filing with the SEC (Securities and Exchange Commission), the company aims to sell 35 million shares with a price band of $14-$16 per share which will bring gross proceeds of $490-$560M. In the first half of 2019, Amwell’s revenue was $69 million, and that jumped 77% to $122 million in the first half of 2020. Though the company is in a loss like Teladoc we expect IPO could also have a major listing gain and investors can hold the stock for the long-term. 

Source:

https://www.sec.gov/Archives/edgar/data/1393584/000119312520228478/d943395ds1.htm

https://www.fiercehealthcare.com/tech/amwell-prices-ipo-at-up-to-560m

https://www.ibisworld.com/industry-insider/analyst-insights/the-current-state-of-the-telehealth-services-industry

https://en.wikipedia.org/wiki/Amwell_(company)

https://in.finance.yahoo.com/

https://www.cnbc.com/world/?region=world

Musk’s Tweet cost $40 million to Tesla

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Tesla, an automotive brand, manufacturing electric vehicles (EVs) enlisted itself in the list of top most automakers within few years of its debut. Surprisingly, this Silicon-Valley based company became competitor to big fat companies like GM, Toyota, Honda, Ferrari and Lamborghini. Though its last year’s sale of 101,312 cars was almost equal to the single car model sales of Toyota, it created much hype with just few car models in the market through a completely different perception of Electric Vehicles by manufacturing high prices & smart models of E.Vs.

Recently, GM, Ford, Cadillac have come up with good number of EV models with timely delivery to customers unlike Tesla which is having issues in such competitive condition. In such problematic scenario CEO of Tesla Elon Musk landed himself and company in trouble with his tweet, “Am considering Tesla private at $420. Funding secured.”  Tesla shares jumped by 7% on the day after the tweet.

 

 The genius who is revolutionizing human transportation was sued by SEC (U.S. Securities and Exchange) for manipulating the stock market. His unprofessional and unethical behavior instigated SEC to bar him from serving as an officer or director of a public company. Replacing Musk would have been nightmare to the company since it does not have the next generations of managers and operators to carry on the business which means the new CEO had to be completely outsider. The Board could not take such a huge risk since market cap fell by 14%, or $7.8 billion, following news that the SEC had launched a civil fraud case against Musk and any change in the Board would have been addition to this bad news.

So, Musk had reached a settlement with the SEC that will require him and Tesla to pay a $20 million fine each, step down as chairman for three years and appoint two new independent directors, but allow him to remain CEO. The stock price surged on Monday after the news and the investors are hopeful that settlement will bring about significant improvements in the company’s corporate governance practices. It has met targets for quarterly car production a huge relief at Chief Executive Elon Musk’s settling of a lawsuit with regulators.

We are still bullish on Elon Musk & his Tesla to continue doing great progress in future.

Income Inequality ? A Rising rage in India

Income inequality in India: Highest in 100 years.

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The famous French Economist Thomas Piketty shown in his recent research that Income inequality is at it’s highest in India. The top 1% of total Indian earn 22% of all income. Out of which top 0.01 % earn 4% of all income.
Let us understand this in context of corporate world in India. For an example, let us assume there is large company have 10,000 employees. Say this company pays 1000Cr as salary to it’s employees in total.According to Thomas Piketty the top 0.01% of the employees such MD/CEO/CFO  in this company earn 4% of 1000Cr i.e 40Cr. & rest 960 Cr is divided among 9999 employees which average comes around 10 Lacs. Hence the MD earns 40Cr & an average employee earns 10 Lac. The MD earn 400 times than its average employee. (400:1). This is what Thomas Piketty is saying in context of corporate India.

Is this true? As per Bloomberg report, they have selected 20 different companies both from public & private sector which has  1.68 billion people in total. They find out that MD’s of private sector companies such as JSW Steel, Bajaj Auto, Hero motor corp, ITC  & ICICI Bank MD’s earn 200-500 times more than their average employees, whereas the companies like TCS & Maruti suzuki MD’s earn only 25 times than their average employees. The MD’s of public sector companies earn just 3 times more than their average employees.

Hence we may think that more the profit of the companies the more salary is paid to their MDs, but that’s not true, companies profits are not directly related to MDs pay. In the example Maruti Suzuki is more profitable than Bajaj Auto & Hero Motor Corp, but Maruti Suzukis MD earns the least among the three.

So if it it’s not the profits then it might be the stock prices of the company? In the example the TCS stock perform well than Infosys in FY 16-17 but the MD of Infosys earn 3 times more than TCS MD.

Hence it is clear the MDs of large private sector companies earn on an average 300 times more than its average employees, regardless of company profits or stock performance.

We should really worried about this issue. This income inequality is raging issue all over the world which leads to various protest in the US as well as in Europe.

In a country like India where there is lack of jobs & fear of loosing jobs among the young Indians,  their MD are getting extremely  high salaries. This is a major concern for our society.

Don’t be blind folded over the rising income inequality issue in India. The government needs to delicately handle this issue over income inequality.

 

Data Source: Bloomberg
Disclaimer: The article is for educational purpose & study for this research is done by Bloomberg. The data in this article is taken from Bloomberg,henceforth the data source is mentioned above.

 

 

 

 

 

 

 

TATA STEEL- A Good Bet!

TATA STEEL, a well know steel maker in India. Looks like the business made a turnaround in recent times. Tata Steel Ltd.’s efforts to turn around its U.K. operations and a recovery back home are beginning to pay off.

tata-steel
Fundamentals:

Tata Steel is currently has the cheapest valuation among other steel makers like JSW Steel, Jindal Steel, SAIL etc. It’s currently trading 1.75 times to its book value. Compare to JSW steel of 2.60 times to its book value. The company OPM has nearly doubled over the previous quarter from March 7.7% to June 14.7%. The company also made a turnaround in its PAT which is 921.09 Cr for June Quarter compare to its previous quarter in March which was negative around (1168.02 Cr). The other income part nearly half from 261 Cr to 161 Cr from March Quarter to June Quarter. Well it’s a good thing from a business that it’s now earning from its main operations.

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Technical:
TATA STEEL has given a rounding-bottom breakout from the levels of 600 recently. In AUG-SEP 2104 it had made a high of 573 & after 3 years it has given a break out from that levels on AUG-SEP 2017. In Quarterly charts volume covered nearly 50% from the previous Quarter with increase in price & given breakout from the levels of 600. Current it’s trading around 655, the near term target of the stock is 770 levels & then 930 levels in coming months. One should maintain a strict Stop Loss of 560. In Quarterly charts RSI is around >50 & <70 at 62.9. The stock will be in growing momentum.
Hence we can see the stock has a potential upside in coming days.
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Disclaimer: The purpose of this company analysis is related study & understanding the company & it’s financials. No profit or losses are guaranteed. Do make your investments on your choice. Trade at your own risk.

Investing in Gold. Should you?

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You probably heard of this at some point of your life, that is “Old is Gold”. It’s true. But I would like to rephrase it in a different manner in context of investment that “Gold is old”. Yes it is! Gold as a investment has become very old these days. As an Indian we have to admit that we love Gold. In fact India is the one of the largest consumer of Gold. Earlier whenever we think of investment we buy gold. But things are changing now a days.

We have got access to various investment instrument like shares, bonds or deposits. Gold is a asset class which are not productive in nature like other assets like shares.

“A pile of gold will stay the same pile of gold as time passes”.

Yes! Buying gold is an excellent passive investment & every household should invest to protect themselves in bad times.

Investing in gold makes sense only for those who don’t have access or trust in the financial system or financial market. It is good for them.

But those who are financially sound person and have some bit of a knowledge about the financial market should always go for asset class which are productive in nature or investment. Buying gold for them should only remain as an asset which will protect their financial position in the market in bad times.

Lastly I would like to say, that if whatsoever you are buying gold,”Don’t go for physical gold”-Because there are drawbacks such as, storing cost in bank lockers, fear of being stolen and some part of depreciation at the time liquidating. There are various modern forms of gold which overcome the drawbacks of physical gold like “paper gold”.There are gold backed mutual funds, Gold ETF’s. However if you don’t mind locking money for 8 years, then Government of India issue gold bonds from time to time. These are tax free as well and you get an extra 2.5% interest p.a every year as a bonus.

Therefore I would like to conclude by saying, Invest in gold in a modern way through Gold bonds, Gold ETF’  or Gold mutual fund & try not to buy physical gold for investment purpose.