Bruce Campbell's Top Picks: September 2, 2021

MARKET OUTLOOK:

Markets continue to hit all-time highs as the economic backdrop continues to show improvement. What investors may feel but are not fully aware of, is that under the surface, the market has been experiencing a correction. When examining market breadth data along with broad stock participation, many companies’ share prices peaked in April or May and have been sideways to down since.  

The technical indicators that we follow started to show some sign of underlying market breadth improvements three weeks ago. We continue to see more of these indicators showing positive changes and we are now on the cusp of seeing most turn positive again. This would mean broad based market participation where not just the largest stocks perform but all market capitalization companies would start to see share price improvements.  

TOP PICKS:

Avanti Energy (AVN TSXV) 
(last bought price $2.07)
Avanti is a helium exploration company led by experienced oil and gas veterans. The long-term demand for helium continues to increase while the global supply is being disrupted. AVN has properties in Alberta and Montana and will have several catalysts this fall including drilling their first well. The company has cash to undertake all of their 2021 exploration program. The stock has recently pulled back from its highs but is starting to reaccelerate as investors are expecting the news flow to pick up in the next few months.

Quipt Home Medical (QIPT TSXV) 
(last bought price $8.22)
Quipt is a healthcare services company that specializes in home management of chronic illness. The company has strong recurring revenue (75 per cent of total revenue) that is diversified by multiple revenue streams. The company has grown organically and via acquisition over the last year. They have seen a 41 per cent revenue increase and a 21 per cent EBITDA increase over the last year and the stock continues to trade at discount to peers

Reliq Health Technologies (RHT TSXV)
(last bought price $1.16)
Reliq is a home healthcare monitoring company focused on chronic conditions. The company offers their iUGO care platform which allows for remote real time monitoring of patients. The company operates on a recurring subscription revenue model which has high margins at scale. The company is forecasting profitability in 2021 and ending the year at run rate revenue of $24 million and doubling again in 2022.   RHT’s CEO has been accumulating stock over the last year.