Ground Floor Stock Pick: Healthcare AI Microcap Healwell AI Inc. (HWAIF) By: Jeffrey A. Hirsch | December 12, 2024 | Email | Print

With small-cap season scheduled to kickoff next week we wanted to bring you a stock idea that’s a little different than our usual recommendations. Healwell AI Inc (HWAIF) is a very early-stage company, but it is moving fast and is supported by a seasoned team and a large Canadian healthcare company. 

 

While much of the push to improve corporate efficiency and productivity with AI is being driven and run by Palantir, organizing and mining through the maze and mess of medical records and patient data is not being done on a major scale as far as we know. This is where Healwell AI comes in. Their mission is to improve healthcare through early identification and detection of disease using its suite of AI co-pilots to detect rare and chronic diseases and improve diagnostic and treatment efficiency. 

 

 

Last month I accepted an invitation to the company’s AI Investor Intelligence Summit in Scottsdale with a host of other analysts and newsletter writers. We have made it quite clear over the past year or so that AI appears to be the “culturally-enabling-paradigm-shifting technology” we speak of that fuels our Super Boom Forecast and outlook (2025 Stock Trader’s Almanac page 11 and April 11, 2024 Issue). As many of you have noticed, I have also been on a health and fitness kick – more of a lifestyle change – the past few years, down 60 lbs. in the process. So, the prospect of learning about a new company harnessing AI for the benefit of everyone’s health was something I had to explore. 

 

Yes, we were wined and dined and played some golf, but we were also treated to two full days of meetings with the company and its principles. I was also given the opportunity to interview the CEO and Chairman which was recorded in a podcast format. I teamed up on the podcast with my longtime friend and fellow newsletter writer Hilary Kramer. Here’s the link if you want to check it out.

 

The company’s main stock listing is in Canada on the Toronto Stock Exchange under the ticker AIDX. The US listing is on the OTCQX which is the top tier of the over-the-counter market, a step above the bulletin board and the pink sheets. The company is planning to list the stock on a major U.S. market in the near future, likely NASDAQ. Including all stock options, convertible debentures and warrants, Healwell has a fully diluted market cap of about $379.8 million at today’s closing price of $1.45.

 

The company has been built through a strategic merger and acquisition strategy and is aggressively continuing to pursue that. This is the same strategy the co-founder and chairman perfected at WELL Health Technologies (WELL.TSX), a multichannel digital health technology company and Canada's largest owner and operator of outpatient health clinics. WELL Health is the company’s strategic partner.

 

Healwell is on pace to be at an annual run-rate of $75 million in revenue by the end of 2024 and is committed to profitability it 2025. The company has a two-pronged growth strategy: 

 

1. To increase its AI capabilities through strategic technology acquisitions like the deal announced earlier this month to acquire a controlling interest in Mutuo Health Solutions for cash and stock. Mutuo has a remarkable AI-scribe technology, AutoScribe, that transcribes clinician-patient dialogue into structured electronic medical records (EMR) data in real-time using machine learning (ML) and natural language processing (NLP).

2. To acquire or partner with major healthcare companies to grow their database of doctors and patient data. The company is currently working on closing a potentially transformational deal in this space with a mature healthcare software and research operation by the end of the year.

 

The company’s technology can currently scan for about 400 different conditions and is being used by about 1000 physicians. 300 of those physicians are at WELL Health. The remaining physicians are at nine other Canadian firms and two firms in the U.S. Healwell currently has a suite of four proprietary AI enabled decision support physician co-pilots. Healwell plans to incorporate Mutuo’s AutoScribe with its existing co-pilots, creating a next generation suite of AI powered physician co-pilots that significantly elevate physician efficiency.

 

Currently underfollowed by U.S. brokerage firms, investment banks and analysts I suspect they will soon be covered by a prominent firm. Remember this stock is early stage and until recently relatively unknown so trade it carefully within your risk/reward profile with sensibly sized positions. HWAIF can be considered on dips below a buy limit of $1.40.