- Since its inception via a reverse merger, Nutex Health (NUTX) the stock traded wildly.
- But currently out of favor, this healthcare management company has fallen to a low valuation.
- Despite its risks, if you are looking for speculative plays with high potential, NUTX stocks can be an excellent choice.
Nutex Health (NASDAQ:NUTX) started trading less than two months ago, but in that short time, NUTX stock has seen big swings. Climbing as high as $52.80 per share in its debut, it fell back to single-digit prices within days.
At the end of last month, he took part in a relatively smaller super rally. Right now, however, this healthcare management company is once again out of favor. For those who invest based on fundamentals, this can work to your advantage.
Why? No longer trading on hype, future price movements are more dependent on its underlying trading performance. That’s not to say it’s not without risk. In fact, more risk-averse investors may want to skip it. Yet, if you have a high risk appetite and are looking for speculative games with high upside potential? You might want to add it to your watch list.
NUTX stock at a glance
Based in Houston, Texas, Nutex Health provides diversified healthcare management services. It is made up of two divisions: Hospital and Population Health. The hospital unit operates specialty hospitals and inpatient outpatient services (HOPD).
The second unit, Population Health, operates Independent Physician Associations, or IPAs. These entities allow small medical practices to pool their resources, thereby reducing overhead. This unit also operates managed service organizations (MSOs) that provide similar benefits to hospitals and physician groups.
As mentioned, this company only went public last month. It went public through a reverse merger with Clinigence Holdings. The former Clinigence took his name and adopted the ticker symbol NUTX. Even now, it’s unclear why there was so much excitement about this deal. Excitement that led to a 525% surge on April 4, the day of the merger.
Perhaps it was because this company markets itself as a “tech” healthcare provider. It may have little to do with its fundamentals, and more due to online hype from retail traders, although that’s not certain. Whatever the reason, however, the wild moves he made last month aren’t what’s most important here. Instead, focus on Nutex’s next step.
It’s no longer “hot stock” – and that’s a good thing
Back in the single digits, the buzz around NUTX stocks has all but disappeared. This is of course bad news for traders who chased him in April. Yet for investors watching it today? This lack of hope and hype about it is a good thing.
From there, Nutex is more likely to make its next big moves based on its fundamentals. True, at present information about Nutex is limited. For example, its last quarterly filing (10-Q) contained only the financial statements of the former Clinigence.
That said, the Clinigence portion of this combined entity has grown rapidly. Its annual revenue grew from $1.5 million in 2020 to $18.8 million in 2021. In the first quarter of 2022 alone, it generated $5.2 million in sales. We also know that the share of this company made up of the former Nutex is profitable.
In the twelve months ending September 30, 2021, it had reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $163.9 million. This combination of a larger, more profitable company with a smaller, but faster growing company could result in a winning combination.
The verdict with NUTX shares
Nutex gets an “A” grade in my portfolio binder. Much information about this has not yet been released. It may take time for a clearer picture of the business to emerge. However, this does not mean that you have to “wait and see”.
With the uncertainty, investors may have overreacted. They could have sent him at too low a price after his big moves last month. From what we’ve seen so far, this company has the ingredients in place to pleasantly surprise the market. This will be what sends it back to higher prices. Not another round of retail investor frenzy.
Again, this is a better game for the risk-hungry rather than the risk-averse. But if you can handle the high risk, NUTX stock is worth considering at today’s prices.
As of the date of publication, neither Louis Navellier nor the member of the InvestorPlace research staff principally responsible for this article holds (directly or indirectly) any position in the securities mentioned in this article.