Why I Buy Andlauer (TSX:AND) Stock Drop

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Andlauer (TSX:AND) is a Toronto-based supply chain management company that provides a platform of customized third-party logistics and specialized transportation solutions for the healthcare industry in Canada and the United States. Today I want to discuss whether this healthcare stock is worth picking up amid the current market correction. Let’s go.

This health title has not escaped the correction

The S&P/TSX Composite Index climbed 345 points on Friday, June 24. Health care led the way, rising 5.9% as a sector on the day. Andlauer shares rose 3.2%. The stock is still down 18% in 2022 at the time of this writing. However, its shares are up 22% year over year.

This company offers investors exposure to the healthcare and supply chain management market. The latter is destined for strong growth in the years to come.

Should you be encouraged by Andlauer’s recent earnings?

Andlauer released its first quarter 2022 results on May 4. Management praised its strong financial performance, crediting its acquisitions and organic growth. It achieved 81% growth in its ground transportation product line, higher volume from its existing customer base and improved growth in its air cargo. The company reported revenue growth of 54% to $148 million. Additionally, operating profit increased by 45% to $24.2 million. It reported net income of $16.5 million, compared to $11.6 million in the first quarter of 2021.

The company continued to provide logistics, distribution, specialized transportation and packaging solutions to wholesale and government customers involved in the Canadian supply of COVID-19 vaccines and ancillary products. Some of Andlauer’s peers, like VieMed Healthcare, also received a nice boost in revenue during the pandemic. However, their business will have to undergo a change in order to compensate for this loss of income, as the pandemic moves more and more into the rear view mirror. Company revenue related to the COVID-19 pandemic represented 5.1% of total revenue in the first quarter of 2022.

EBITDA climbed 54% year over year to $39.4 million. The company aims to sustain growth going forward through an aggressive acquisition strategy. In the first quarter of 2022, Andlauer acquired 100% of the issued and outstanding shares of Logistics Support Unit (LSU). This will add the company’s own third-party logistics infrastructure to this company’s impressive holdings.

Is This Healthcare Stock Worth Buying Today?

Andlauer shares had a favorable price-earnings ratio of 20 at the time of this writing. The stock fell into technical oversold territory in mid-June. He has since staged a comeback with the entire Canadian market. Luckily, it’s not too late to recoup that dwindling healthcare stock. It is trading in attractive value territory relative to its industry peers. Moreover, it is poised for very strong earnings growth in the future.

This stock announced a quarterly dividend of $0.06 per share in its Q1 2022 earnings report. That represents a modest yield of 0.5%. I am still looking to recover Andlauer before moving on to July.

About Barbara J. Ross

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