Global Health is an Australia-based company that develops, sells and supports the application software for the healthcare sector. The business also integrates systems that allows electronic medical records, messages, and other services to be exchanged between healthcare professionals and the patient.

Robust demand for Lifecard Patient Portal

Today, Global Health advised that COVID-19 was driving unprecedented demand for digital healthcare engagement through its Lifecard Patient Portal.

The platform was soft-launched more than 3 years ago and deployed on 3 customer sites. Since March when the pandemic impacted everyday lives, Global Health installed the Lifecard Patient Portal on 12 other platforms. That has led the company to achieve a recurring revenue stream of more than $50,000 per month within 18 months.

Global Health noted that COVID-19 has accelerated demand for its products, as the population moves towards the digital healthcare space. In turn, the push into online systems gives accurate and up-to-date information from patients to medical professionals, thus improving efficiency and productivity.

Management commentary

Global Health managing director Matthew Cherian, said:

Global Health is constantly looking to enhance the doctor/patient experience and improve healthcare provider productivity and efficiency, while ensuring that patients do not get lost in administration and paperwork when seeking help for their health conditions and medical issues.

The additional cost of the Lifecard Patient Portal will generate immediate financial returns for our provider customers through time saved, reduced errors, and accurate patient health and financial information into Provider clinical systems. The bottom- line results are extremely compelling for healthcare providers.

Global Health share price performance

The Global Health share price reached a 52-week high of 60 cents last month. This came as the company announced that Western Australia had awarded a 10-year contract for MasterCare EMR.

Although, its shares have since dipped around 25%, the Global Health share price is up more than 200% for 2020.

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Before the market halt this morning, the Global Health share price was trading 50% higher at 60 cents. This compares to the All Ordinaries Index (ASX: XAO) which was up 1.2% to 6,687 points.

What is moving the Global Health share price

Global Health has won a contract with Western Australia's Mental Health Commission (WA MHC).

Under the deal, the digital health company will implement its MasterCare electronic medical record (EMR) platform to WA MHC. The agreement will service for up to 10 years and is scheduled to go live on July 1, 2021.

WA MHC is responsible for a network of mental health, drug and alcohol services. These services are purchased from a range of government and non-government providers that help rehabilitation efforts.

The MasterCare EMR platform will enable WA MHC to meet key reporting requirements for alcohol and other drug treatment services. With the adoption of MasterCare, the organisation can manage client treatment and connect different infrastructure to alternate digital heath programs.

The project's initial phase is worth $850,000 in the first year alone. This includes implementation, services and subscription of MasterCare EMR, MasterCare dashboards-as-a-service and ReferalNet secure messaging platform. There is a possible upgrade path to MasterCare+ SaaS platform over the term.

Management commentary

Global Health general manager of the MasterCare platform, Kye Cherian, said:

We are really excited by the opportunity to work with the WA Mental Health Commission on this project. They deliver a fantastic service that provides critical support to individuals and families that need it most. As a product team, we are proud to be working with community health organisations of this calibre.

This project further strengthens our claim as the premier solution for community health organisations across Australia and improves on the MasterCare products credentials in this space.

Global share price summary

The Global share price has been a strong performer over the year. Its shares have jumped from 14.5 cents at the beginning of the year to 60 cents today. This represents a gain of more than 300% for the stalwart investors who decided not to cash in on their profits.

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What's moving the Global Health share price?

The Global Health share price is on the move today after the company reported it has signed an important contract with Butterfly Residential Care. The new deal will see both companies integrate a client management system that focuses on dealing with mental health issues.

Butterfly Foundation is the national organisation for people living with eating disorders and body image issues. The organisation's mission is to change lives by providing evidence-based support services, as well as delivering prevention and early intervention programs.

Backed by the federal government, Butterfly established a subsidiary called Wandi Nerida which is operated by Butterfly Residential Care. Located on Queensland's Sunshine Coast, Wandi Nerida is Australia's first, community-based residential facility for eating disorders.

The state-of-the-art, purpose-built facility will house 13 beds and provide a phased treatment structure to address mental illness. Providing the company is able to secure enough funds, the clinic is expected to open in mid-2021.

The integrated client management contract is worth in excess of $122,000 to Global Health for the initial 12 months. The agreement will feature a portfolio of Global Health products such as its MasterCare services, ReferralNet program, and HotHealth Virtual Care platform.

What did management say?

Wandi Nerida Executive Director, Ms Jodie Ashworth, spoke about the new partnership. She said:

Butterfly Foundation has partnered with Global Health to provide an EMR and PAS solution for Wandi Nerida, Australia's first residential eating disorder facility. Global Health maintained a high focus on customer service and adaptability throughout the selection process. Their experience with ICT solutions for mental health services made them a clear choice for developing innovative solutions for leading edge health providers.

Adding to Ms Ashworth's comments, Global Health Managing Director, Mr Matthew Cherian said:

Our team acutely understand what is happening in the mental health space in Australia, having developed the IT services to assist and recognise the importance of this initiative. We are strongly committed to supporting the Wandi Nerida facility to become the benchmark and ultimately viewed as the best practice model in dealing with the specific needs of people living with an eating disorder.

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On the opening bell, shares in the med tech company lifted 38% to 47 cents from the news. However, its shares have slightly come back to earth, and are now trading up 20.59% to 41 cents.

Let's take a look and see how Global Health performed for the quarter.

Q1 performance update

For the period ending 30 September, Global Health reported a strong result. The uplift in its key financial metrics continues to track a positive trend over the past 2 years.

Monthly recurring revenue from its software-as-a-service (SaaS) platforms achieved 13% growth on the previous corresponding period (pcp).

Underlying customer revenue increased by 21% to $1.46 million, driven by demand in healthcare providers switching to digital technology.

Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped more than 315% to roughly $262,000. Net profit after tax (NPAT) also rose, up 188% to $225,000.

COVID-19 impact

Global Health advised that management and staff are continuing to operate from home using the Microsoft TEAMS collaboration platform. Productivity and support tickets have been mainlining expected levels, without disruption.

New sales and project revenue however, has been impacted, particularly in Victoria. Sales commitments have been deferred, while community health opportunities remain under consideration, including those that require interstate travel.

Contracted Victorian projects have slipped past 6 months, with the implementation of MasterCare EMR to go live commencing December. The three locations of the new launch will be at the Bellarine Community Health, Ballarat Community Health and Peninsula Health.

Pipeline opportunities

The fallout from COVID-19 has led to a focus on mental health services. Global Health has seen a shift in digital technology offerings from healthcare providers to improve service delivery.

The company's flagship MasterCare EMR platform is currently involved with proposals worth over $4 million. The outcome of those tenders is to be decided in the coming months, with Global Health to provide an update.

Outlook

The company noted that post-COVID-19, the healthcare landscape will be substantial and long-term, particularly mental health.

Global Health recognises the need for digital platforms to address mental health, drug and alcohol, and other chronic disease issues. New expansion opportunities such as the company's Lifecard Personal Health platform are anticipated to meet this need.

In addition, the company believes that healthcare services in future will be provided without the need for face to face consultations. This in-turn will benefit remote and rural communities.

Global Health managing director, Mathew Cherian spoke about the rising challenges. He said:

Many areas of the Australian Life have been forever changed by COVID-19 pandemic. Businesses have to be more aware of the physical and mental health of their workforce. Sporting organisations also have to rethink their approach to the healthy participation of their members, coaching staff and volunteers to ensure that sporting activities can go ahead in a responsible manner.

Special attention of the needs of the elderly members of our community also needs to be addressed. Global Health's digital technology platforms can make a significant contribution to these issues as Australia works towards effectively managing the environment we face.

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What moved the Global health share price?

Almost 3 million Australian's live with asthma. Asthma Australia aims to halve avoidable asthma hospitalisations by 2030. Using the The Lifecard platform, users are able to better manage their health and wellbeing. 

Lifecard connects consumers with their care team so they can work in tandem to comply with prescribed care plans. ReferralNet, Global Health's secure message platform, integrates with Lifecard. Consequently, subscribers can receive health and medical information directly into their Lifecard Personal Health Record. 

Furthermore, work has begun to integrate Lifecard with wearables and remote monitoring devices. This additional data will provide a more complete and real-time view of a consumer's health, enabling more informed decisions. The company plans to integrate asthma-related data, such as peak expiration flow rate, from wearables.

What did management say?

Global Health managing director Mathew Cherian said:

We are looking forward to the year ahead and what we can achieve together with Asthma Australia. Our shared belief and vision is that the Lifecard platform is an invaluable tool to help consumers manage their long-term conditions and encourage a healthy lifestyle through pro-active engagement.

Asthma Australia CEO Michele Goldman also welcomed the partnership, saying:

People with asthma will often see more than one health professional over the course of time, even multiple visits to different emergency departments. We often hear that people with asthma get rather exhausted retelling their health history, which can be complex and traumatic, and that doctors appreciate the opportunity to assess a health record. 

Lifecard is all about more complete information with a holistic picture that enables more insightful conversations between a patient and their doctor. We see this partnership as a great opportunity
for people with asthma to embrace a health tool, and another step toward individualised, person centred health care.

The Global Health share price closed the day up 73.91%.

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Tom Richardson: Blackmores Limited (ASX: BKL)

Shares in vitamins, baby formula and nutritional supplements retailer Blackmores are up 170% over the last year thanks to a 159% lift in earnings per share to $2.80 for the most recent half year.

One common mistake is for investors to think they've missed the boat after big share price rises, although, at $160 shares look good value for growth-oriented investors being on 28x annualised earnings per share, with a 2% dividend yield. I expect demand from Asia will fuel more strong earnings and share price growth over the next 3-5 years, even if China does levy higher taxes on Blackmores' products.

Motley Fool contributor Tom Richardson owns shares in Blackmores.

Rachit Dudhwala: Macquarie Group Ltd (ASX: MQG)

Macquarie Group has gone from strength-to-strength following a transition of its business mix to a greater emphasis on annuity-style revenues (as opposed to predominately capital market facing businesses). The group now earns approximately 74% of its earnings from annuity-style businesses, most of which comes from offshore operations, reducing the investment bank's exposure to the Australian market and setting it apart from the big four banks. Macquarie is slated to announce 2016 full-year results later this week with expectations of an increase to 2015 full-year profits, making it a top stock to watch.

Motley Fool contributor Rachit Dudhwala does not own shares in Macquarie Group.

Matt Bugden: Sirtex Medical Limited (ASX: SRX)

The opportunity created by a pullback in Sirtex shares still exists as shares are down around 25% year to date following disappointment with the company's half year results.

More broadly, Sirtex boasts an impressive growth story which remains on track. Sirtex's targeted radiation treatment for liver cancer has increasing support in the medical community and a huge potential market globally. Sirtex has no debt, high returns on capital, and fast growing earnings. Priced near $30, Sirtex shares represent an attractive mix of growth and value. Broker consensus is a 12-month price target of around $40.

Motley Fool contributor Matt Bugden has no financial interest in Sirtex Medical.

Christopher Georges: Surfstitch Group Ltd (ASX: SRF)

Investors who are comfortable with a higher level of risk-reward potential should consider Surfstitch at the current share price. It has been more than six weeks since the company provided any updated news regarding the possible takeover by its former CEO and this information vacuum has seen the shares fall back to pre-announcement levels. Despite this, I think patient investors could be well rewarded even if an offer does not eventuate as the longer term growth potential for Surfstitch remains quite attractive.

Motley Fool contributor Christopher Georges owns shares in Surfstitch Group.

Regan Pearson: Global Health Limited (ASX: GLH)

Microcap software company Global Health has attractive growth prospects, a growing market and a bargain share price. The company's products make healthcare records more accessible by connecting healthcare clinicians to consumers. The company currently sells for just 12x trailing (2015) earnings, but comes with a solid EBITDA margin of 27%, minimal debt and strong long-term growth prospects.

Recent contract wins and a 'significant' sales pipeline have CEO Matthew Cherian aiming for up to a five-fold increase in revenue growth to between $20 million to $25 million by 2020. This will be delivered through organic revenue growth and acquisitions.

Motley Fool contributor Regan Pearson owns shares in Global Health Limited 

Ryan Newman: Blackmores Limited (ASX: BKL)

The market's darling of 2015 has been its battering ram so far in 2016, but now could be a great time to revisit vitamins and infant formula producer Blackmores.

Although the shares aren't necessarily cheap, investors are being given the opportunity to buy at something of a discount based on the market's concerns regarding regulatory changes in China. However, Blackmores appears to be well-positioned to cope, and could continue to grow sales and earnings strongly for years to come.

It's not without risk, and shares could remain volatile in the near-term, but they could still pay off for long-term investors.

Motley Fool employee Ryan Newman does not own shares in Blackmores Limited.

James Mickleboro: Australian Pharmaceutical Industries Ltd (ASX: API)

Australian Pharmaceutical Industries is the owner of the Priceline, Soul Pattinson and Pharmacist Advice brands. Late last month it reported its interim results and delivered a solid 18% increase in underlying net profit after tax of $25.3 million. I believe the company will be able to keep its bottom line growing at this rate for a number of years thanks to its aggressive expansion plans. The shares have climbed close to 4% since the results, but I believe there is still room for them to go higher in the years ahead.

Motley Fool contributor James Mickleboro has no financial interest in Australian Pharmaceutical Industries.

Edward Vesely: REA Group Limited (ASX: REA)

REA Group, the owner of www.realestate.com.au, reported recent half year results showing that revenue was up 20%. While net profit and earnings per share were both up 28%. The good times keep rolling, but there's more to come. With the recent strategic acquisitions of iProperty Group and Flatmates.com.au, REA Group's earnings momentum and expanded market opportunity are acting as tailwinds for this business. Now is a good time as any to initiate a position as it has a debt-free balance sheet and share price which has gone nowhere since early 2014.

Motley Fool contributor Ed Vesely does not own shares in REA Group.

Ry Padarath: Carsales.com Ltd (ASX: CAR)

Carsales has one of the most enviable business positions on the ASX. It has a dominant number one position in car sales in Australia, and continually reinvests a portion of profits to improve the user and car dealer experience.

It has the brand power to expand into adjacent domestic markets including Tyresales.com.au and car finance, entrenching its network effect. Management has also begun to export its strengths and "online car selling playbook" internationally, with operations in South Korea, Mexico, Brazil, and most recently, Chile. A fantastic growth stock.

Motley Fool contributor Ry Padarath owns shares in Carsales.Com Ltd.

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Given the projections for growing life expectancies it is reasonable to assume that healthcare demand will continue well into the next decade.

With such a wide range of companies to choose from here are four healthcare companies I think could be long-term winners.

Heathcare services

Health insurance provider NIB Holdings Limited (ASX: NHF) grew earnings per share (EPS) by 8.8% last financial year (FY15) and is on track to continue this momentum into the 2016 financial year (FY16). The company's guidance is for operating profit in the range of $85-$90 million, an increase of up to 10% on the year just gone and it has a nice dividend yield of 3.8%.

To balance the exposure to health insurance I would add Capitol Health Ltd (ASX: CAJ) to the portfolio. Capitol Health is following a 'roll up' acquisition strategy for diagnostic imaging centres, a strategy currently loathed by many investors.

Imaging centres are where you go when you need X-rays, CT scans, MRI scans or ultrasounds and Capitol Health grew revenue 23% in FY15, of which 8% was from organic demand. Heading into FY16 the company expects to maintain its strong performance.

Healthcare Information Technology (HIT)

Information technology is essential to transform the healthcare industry from a lethargic paper mess to an efficient machine. A number of companies are helping to lead the way here, from profitable local provider Global Health Limited (ASX: GLH) to Kiwi operator Orion Health Group Ltd (ASX: OHE) which has been winning big contracts in the U.S.

Product companies

While my dream healthcare portfolio would include breathing device maker Fisher & Paykel Healthcare Corp Ltd (ASX: FPH), at a current price-to-earnings ratio of 32 the company commands a significant price premium compared to the S&P/ASX 200 Health Care Index on 27.

To this end ResMed Inc. (CHESS) (ASX: RMD) is a more attractively priced option to also benefit from long-term demand. ResMed grew revenue by 8% in FY15, the same rate as Fisher & Paykel Healthcare.

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With the cost of healthcare and health insurance on the rise, individuals are also staying on top of their own health status with a variety of technologies. The federal government is doing its bit, having spent $1 billion on the national myHealth electronic records system. This revolution, however, has not yet reached maturity, which means there is time for investors to benefit and these three ASX listed stocks should be top of your list.

With the resources of a top 10 ASX listed company, Telstra Corporation Ltd (ASX: TLS) could be the behemoth of Australian e-health. Although many people would be unfamiliar with Telstra's e-health offering at this point, the company has thus far invested over $140 million in health technologies and is aiming to generate $1 billion in annual revenue from health by 2020.

Telstra is currently deploying ReadyCare, a service where patients can connect to GPs via telephone or video call and get diagnosis, prescriptions and treatment without leaving their home. It's conceivable that this could become a large market for Telstra as the model has already proved popular overseas. In the US, more than 800,000 online patient consultations will be provided this year, according to the American Telemedicine Association (ATA). Telstra's partner in this offering, Swiss company Medgate, already conducts approximately 4,300 consultations every day in its home market.

Telstra also has a significant stake in Australia's number one health appointment booking system, Health Engine. The service has over 50,000 registered practices and derives revenue both from advertising and a fee charged for each booking. There is also likely to be flow on benefits for Telstra's larger telecommunications and network applications divisions as the e-health industry utilises its products and services.

ResMed Inc. (CHESS) (ASX: RMD) is another business that is adapting to take advantage of the digital age. ResMed's core operating business is in developing and selling machines to assist with breathing and sleeping disorders such as sleep apnoea. Two announcements late last year demonstrate how ResMed will move with the times.

The first was a tie-up with Nintendo, who the company will work with to create a new product which will likely utilise the gaming giant's software design and user experience skills to present relevant and personalised information regarding the user's health.

The second announcement was arguably more important, if only because it involved the world's largest company – Apple. ResMed announced that it's latest S+ sleep monitoring product will be compatible with the Apple HealthKit, allowing the product's owners to see their sleep information alongside other health information from their iPhone and other connected devices. Significantly, ResMed also announced that the S+ would be sold by Apple in its stores and online. These announcements show that ResMed has embraced the future, leaving the company poised to grow its product market and market share.

A relative minnow with a market cap of just $11 million, Global Health Limited (ASX:GLH) is a riskier proposition than Telstra and ResMed, but has plenty of room to grow. Global Health sell a range of proprietary electronic patient management and health administration systems. Its customers include hospitals and health practices. The share price of the company took a battering when it lost the contract with SA Health to provide the patient management system for 64 hospitals. However, the company has been involved in the government's e-health transition and provides access to patients' personally controlled e-health records through its systems. This is a potential differentiator in the near term and may allow the company to grow its market share.

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So What: Bringing on a new practice is welcome news for patient shareholders that have suffered through inconsistent messages from management and the loss of a major contract to SA Health over the last 12 months. The loss of the contract, which actually was a failure of SA Health to upgrade from the legacy 1980s CHIRON system, proved earnings were not as resilient as shareholders believed.

Global Health announced that the lost contract would cost approximately 1.5 cents per share of earnings this year, or 34% of FY2014 earnings, despite stating previously that the business model had been de-risked due to 80% of revenues being recurring. This loss of confidence has been the catalyst for a number of analysts recommending selling the company.

What Now: The new contract is good news but is only for a single, 78 bed hospital, compared to the 64 hospital contract with SA Health. Earnings upside will be minimal, one would imagine, seeing as the announcement wasn't considered market sensitive. Many long-term shareholders, like yours truly, are sticking with Global Health because so many hospital and health organisations are calling for software just like Global Health's.

Analysts are predicting earnings per share of just 3.2 cents in the 2015 financial year, representing a price to earnings ratio of just 8.8 based on the last sale price of 28 cents. With a market capitalisation of just $8 million and no dividend on offer, Global Health is still a risky proposition and investors like me are far from certain about the integrity of management.

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In this article, I'll outline the remaining five companies that appear to have very bright futures. Now I'm not talking about speculative biotech stocks. All these companies are currently generating profits.

Medical Developments International Ltd (ASX: MVP) recently reported a 71% increase in net profit to $731,000 for the six months to December 2014. That came on the back of a 21% rise in revenues, as sales of Penthrox grew 39% and respiratory device sales were up 29%. The share price has followed that success, jumping 58% in the past year. While not cheap, Medical Developments is one to watch.

Paragon Care Ltd (ASX: PGR) supplies hospitals and aged-care facilities with medical equipment, including trolleys, beds, custom medical furniture, screening as just a small sample of the products it distributes. Paragon looks cheap at current prices particularly with the growth it has seen recently. Revenues for the last half jumped 65%, and management increased the dividend by 20%. That's not something you'll see from any large cap stocks.

Capitol Health Ltd (ASX: CAJ) is an up-and-coming diagnostic services provider and has recently expanded in a big way with recent acquisitions of Imaging @ Olympic Park in Melbourne and entry into the NSW diagnostic market with the purchase of Southern Radiology Group late last year. The share price has run hard, up 78% in the past year, but further gains may be on the cards once the acquisitions are factored in.

Vita Life Sciences Limited (ASX: VSC) sells a wide range of supplements, vitamins and minerals, meal replacement, sports nutrition through Asia and Australia, with 62% of revenues coming from Asia and growing rapidly. Entry into new countries and the release of other product lines into existing markets should drive growth. Vita Life is currently trading on a trailing P/E ratio of 11.9x, compared to its most direct competitor Blackmores Limited (ASX: BKL) on 24.7x. With revenue growth expected of between 8-10% per annum, that suggests Vita Life is cheap.

Last but not least, Global Health Ltd (ASX: GLH). The company provides software and applications for the healthcare industry but has seen its share price slide from a high of 80 cents to around 26 cents currently. Thanks to the loss of a licence in South Australia, Global health is forecasting flat revenues for the year ahead, and revenues of around $1.1 million. At that price, the stock is trading on a P/E ratio around 8x, which appears cheap.

The post 9 juicy health care stocks to add to your portfolio: Part 2 appeared first on The Motley Fool Australia.

The announcement takes the number of headspace centres using Global Health's EMR system to 42, out of the existing 77 centres nationally. This number is forecast to increase to 100 by December 2016 and the company is well placed to be the provider for all 100 based on current success.

Revenue from the company's MasterCare EMR application has increased by 33% in the first four months of the financial year and the rollout of a cloud-based application may allow an international expansion for the company.

Is now the time to buy?

Global Health shares are trading 63% lower than they were in mid-March and could represent a reasonable opportunity for long-term investors. Questions still hang over the group's earnings for the financial year after the South Australian Government declined, and then appeared to reconsider, an upgrade from the aging CHIRON Patient Administration System to the new MasterCare ePAS system.

The loss of the SA Health contract could result in a 1.5 cents per share hit to earnings for the financial year, representing over 30% of FY14 earnings. If the impact to the company is a decrease from 4.4 cents per share to 2.9 cents per share for FY15, the company is trading on a price to earnings ratio of just over 10. This could be a good buying opportunity if the company's outlook of regaining the lost earnings within 12-18 months is achieved.

Investors should note that capital expenditure will rise over the coming years to maintain R&D efforts. This may depress earnings growth in the short term but may speed up the group's expansion plan overseas. Companies like ResMed Inc. (CHESS) (ASX: RMD) have for years spurned massive dividend payouts in favour of greater R&D spend to boost the product pipeline, and thus profits, well into the future.

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Intelligent investors know it sometimes pays to spread your wings in search of investment opportunities and several of today's top performers are small players with big ambitions. Let's take a look at what they have to offer.

Global Health Limited (ASX: GLH) is a micro-cap stock that has caught the attention of several respected investors and its shares are up 5.5 cents or more than 14% today. E-health looks a clear future trend and Global Health designs and supplies software support applications to help medical professionals and organisations manage their own and patients' records.

The digital records are stored in the cloud for convenience and the group believes the sky is the limit in its attempts at selling its cutting-edge software and systems to the healthcare marketplace globally. Net profit last year was $1.4 million and investors obviously liked today's update provided to the market.

Paladin Energy Ltd (ASX: PDN) has climbed more than 5% today and around 20% this week after uranium prices shot up on the news that Japan is to restart some its previously dormant nuclear reactor power stations.

As a uranium miner Paladin is entirely reliant on growing demand for nuclear fall and unsurprisingly its share price is sensitive to the energy policies of developed nation states such as Japan. Ever since the Fukushima nuclear disaster uranium prices have been in a prolonged bear market and whether the recent rally lasts amidst a backdrop of generally falling demand is questionable.

Mobile Embrace Ltd (ASX: MBE) is a mobile payments and mobile marketing company which has seen its shares climb one cent or more than 5% to 19.5 cents today. The group delivered a net profit of $2.49 million last year and the stock is around 33% off 52-week highs hit at peak excitement levels over its potential to cash in on the global mobile revolution. It certainly looks one for the watch list.

Clover Corporation Limited (ASX: CLV) climbed 1.5 cents or nearly 4.5% today as investors remain interested in its potential to provide nutritional health foods to children. The company sells functional ingredients for use in children's foods, supplements and pharmaceuticals.

More than half of the company's sales already come from fast-growing Asian markets although the company saw sales slump last financial year due to a health scare incident around whey protein concentrate at a related New Zealand business.

However, the business expects to regain lost revenues this financial year and today's discounted share price may be an opportunity provided sales recover over the medium-to-long term.

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The most pleasing aspect of the report was that sales of the Mastercare Electronic Medical Record system to the non-acute health sector improved by 23%. This product targets diverse clients such as psychology practices and thus there is less risk of the loss of a single important client. Furthermore, this is the business line that I believe can achieve the most growth within Australia.

However, one factor on shareholders' minds will be the vastly increased capitalised research and development (R&D) spending, which was up over 33%. The company spent about $1.1 million developing software, and received a grant of  $482,000 for developing new products that ought to benefit shareholders in years to come. On a basic level, if you believe in the business opportunity, it follows that the company should be aiming to have the best product suite it can.

On the other hand, much will depend on how effective this R&D spending actually is. As new products begin to earn revenue, the company will gain a better idea of whether those R&D intangibles are undervalued or overvalued on the balance sheet. At this stage, it's simply not possible for anyone, let alone retail investors, to know the value of this research.

The company is continuing to develop its cloud offerings, because these kind of products are far more easily scalable and progressively more useful as telecommunications improve. With that in mind, the company has begun the process of selling into South East Asia, possibly from the existing office in Malaysia. Although no sales have yet been achieved, should the company successfully expand into these developing countries, it would likely be worth far more than its current $18 million market capitalisation.

Even without successful overseas expansion, the company is arguably worth more than that based on its prospects in Australia. The CEO Mathew Cherian has led me to believe that only new product R&D is capitalised, although obviously the definition of what is new and what is simply improved or updated may at times be ambiguous.

However, I think its reasonable to assume that allowing for a small amount of capital expenditure to keep products competitive, free cash-flow (when you exclude capex on new products) is somewhere between $1 million – $1.2 million.

If that's correct, then the company still looks like pretty good value at around 55c – 60c, considering that there are still plenty of potential non-acute customers who could benefit from the company's software. Shareholders are doubtless mindful of the fact that healthcare spending will grow with the ageing population, and increasing awareness of mental illness.

The bottom line is that the results of the current pilot program for integrated cloud applications are extremely important. The new software as a service model is expected to result in a "significant improvement in the efficiency of [customers'] operations." If it does, the chances that Global Health can grow into a much bigger company are very much improved.

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As Australian investors, we've got a never-ending supply of small-cap stocks which we can take a punt on. Generally, a vast majority come from the resources sector where many would-be miners are trying to find capital to fund exploration or develop projects.

However, if we can identify those companies which can bridge the gap between what they are and what they want to become, the rewards can be spectacular. Here are three high-risk small-cap stocks I'd consider taking a punt on.

1. Australian Bauxite Ltd (ASX: ABX) is a bauxite explorer and, potentially, a low cost producer with operations dotted across Australia's eastern seaboard. The company recently completed a trial mining period at its Tasmanian operations. With Indonesia's ban, bauxite prices are tipped to remain well above the estimated costs of production at the Tasmanian and Goulburn South operations.

2. Strike Energy Ltd (ASX: STX) is a $92 million oil and gas exploration company with good assets in both the US and South Australia's Cooper Basin. With a booming oil and gas industry in the US, Strike's assets are well placed to benefit from increased activity in the sector. However, closer to home, Strike's assets in the Cooper Basin provide significant room for value accretion. With joint venture partnerships, close proximity to key infrastructure and increased demand for LNG from Australia's east coast, the company appears worthy of your consideration.

3. Global Health Limited (ASX: GLH) provides innovative software development for Australia's healthcare sector. Whilst the company has a market capitalisation of just $18 million, it's already very profitable and less risky than both ABX and Strike. Recently the company released an update on its full-year financial performance and expects to report revenues of $5.25 million and net profit after tax of $1.44 million for FY14. Despite ongoing growth, the market ascribes a very low valuation to its shares.

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Whilst it can be exciting to take a punt on a stock, the sharemarket is no place for gambling all your money away. Before buying into any of these three companies, careful research is a must and investors should ensure they maintain a well diversified portfolio. In my opinion all of these companies hold significant long-term upside potential but unlocking said potential will be the most difficult part of their journey. That's why I believe investors must maintain a diversified portfolio and shouldn't spend what they cannot afford to lose. It's important to remember, none of them pay a dividend.

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For example, I first noticed Global Health Limited (ASX: GLH) when shares where trading at around four cents. I liked the idea of providing electronic medical record systems to hospitals, psychologists, and psychiatrists, but the company had a long history of losing money. The cashflow was nonetheless improving, and when the company subsequently announced an upbeat profit forecast, I became satisfied with the risk/reward split on offer. I began buying shares at 23.5c, and I'm now sitting on gains of well over 100% in less than a year. For that reason, I think it's worth keeping prospective speculative stocks on your watchlist.

ICSGlobal Ltd (ASX: ICS) is another tiny company with improving fortunes. It owns a medical billing company that manages billing for a variety of healthcare specialists. Its main competition is supposedly, "the incumbent secretary or practice manager who currently do the billing for the specialist." Its core competency is collecting debts from patients, and the company aims to do so more efficiently than medical secretaries. With no debt, a reasonable growth trajectory and consistent cashflow, I think the company is a reasonably low-risk microcap, only really speculative because of its size.

A promising but slightly higher risk play is Antaria Limited (ASX: ANO), a company that manufactures zinc oxide, the UV blocker in sunscreens and some cosmetics, and Alumina, a powdery substance used in cosmetics. The company has recently reported a small positive operating cashflow, despite facing a recent setback when a distributor decided to reduce inventory. The cash balance is a bit low for my liking (there is a possibility of capital raising), but the managing director Rade Dudurovic has been buying shares on market. So too has substantial shareholder Lev Mizikovsky, the founder (and major shareholder) of Tamawood Limited (ASX: TWD). The long-term angle I like about Antaria is that it can provide multiple brands with raw ingredients (and the dangers of skin cancer are well known). The long-term risk is that sunscreen and cosmetic manufacturers stop using nano-particles as UV blockers.

If you're looking for a safer option, I think Nearmap Limited (ASX: NEA) is well worth consideration, though it is (justifiably) more expensive. The company is still a bit speculative because it made a loss in FY 2012 and FY 2013. However, that was mainly as a result of legacy issues with the previous IP licensing business and the fact that the company had not yet begun charging user fees for its aerial images. It reported a modest profit in the first half of FY 2014, and boasts partnerships with serious internationals such as Google Inc (NASDAQ: GOOG) and Amazon.com Inc (NASDAQ: AMZN).

Another small company that I like is funds manager Australian Ethical Investment Limited (ASX: AEF). I have the impression the company is not taking full advantage of its brand though and it could improve marketing and communications by all reports. On the other hand, its investments have performed reasonably well, in particular its Small Companies superannuation fund, which has averaged 9.1% p.a. over the last 10 years and its Small Companies trust, boasting over 10% p.a. for 10 years. If the company can only emphasise the fact that its investments are considerably more ethical than the "ethical" option offered by most funds, it should be able to grow funds under management strongly. This is particularly true because young professionals increasingly support divestment campaigns, and younger investors will be contributing to superannuation for a long time to come.

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That's some handy profits, although I only hold medical software company Global Health, these days. I'm relying on the fact that the company is continuing to grow revenue. It was some comfort to see that one director bought some shares on market recently, even if he did fail to notify the ASX on time. Meanwhile, hopeful biotech Anteo Diagnostics still hasn't announced that company-making first deal investors are waiting for, though if and when it does, the share price should soar.

My current favourite speculative stock is Kip McGrath Limited (ASX: KME), a company that owns the eponymous tutoring franchise. The global brand is arguably undervalued by the market, and locally cuts to public school funding will make private tutoring all the more important. Like Global Health, I expect that Kip McGrath will cease to be considered speculative in the coming years, by reporting consistent profits.

Electric scooter manufacturer Vmoto has recently recorded its maiden yearly profit, and was even narrowly cashflow positive in the most recent quarterly report. Unfortunately, Director Simon Farrell has suddenly resigned for unexplained reasons and the company was put into a trading halt because it lacks the requisite number of Australian based directors. While I have reservations about management, the story is compelling because 2-stroke scooters are extremely polluting: their fumes are particularly harmful to humans (more so than car fumes). Chinese cities are keen to encourage electric scooters as a replacement.

Another speculative stock that deserves to be on your watch-list is Analytica Limited (ASX: ALT) which makes and is marketing a treatment for incontinence. Apparently, the problem is more widespread than you might think. I look forward to adding the company to my portfolio if it comes down in price. The capital raising at 2.4c was not fully subscribed, and the remaining shares will be placed (mostly to the chairman).

Part of the reason that I'm low on cash (for investing) is my recent purchase of MGM Wireless Limited (ASX: MWR), a company that specialises in mass communications, allowing schools to contact all their students instantaneously via SMS. The company is not exactly cheap at current prices, but it did recently buy another company that provides online payment and communication capability to schools, allowing parents to order lunch or sign permission slips over the internet. Though there is undoubtedly competition, the acquisition will prove positive if MGM can roll out the platform to some of its existing clientele.

Nanosonics Limited (ASX: NAN) is another interesting biotechnology company. It makes a device that can sterilise ultrasound probes more effectively than the current methods. The system can literally save lives by preventing infection. Nanosonics is a bit too expensive for me, with a current market cap of $210 million, but holds significant potential – especially at a lower price.

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The following companies have proven they have the ability to grow at more than 15% and could be on their way to doubling their earnings in the next five years.

Energy producer Senex Energy Ltd (ASX: SXY) has hit significant production growth in the Cooper Basin and is likely to grow further as prices for east coast natural gas grow significantly in the next three years. Senex has grown net profit after tax (NPAT) from a loss of $3.5 million in 2011, to $61 million for the full year 2013. Continuing this trend in the first-half of FY14 underlying profit was up 36%.

Another company exhibiting aggressive growth is Yellow Brick Road Holdings Ltd (ASX: YBR), an ambitious wealth management company which is targeting up to 300 branches from 168 in operation at the end of FY13. The company grew revenues by 31% in 2012 and 68% in 2013 and is aiming to have positive cash flows by 2015.

Cloud focused, e-healthcare company Global Health Limited (ASX: GLH) also has many fast-growing ingredients to become a key healthcare player working with hospitals and care providers. Global Health had a great first-half result and is targeting full year NPAT growth of between 53% and 74%, on top of a 266% increase in 2013.

Resort and casino operator Donaco International Limited (ASX: DNA) is on track to significantly increase revenues and profit when it launches its new 428-room hotel in Vietnam in May. First-half adjusted NPAT grew 21% ahead of the launch and this is likely to rise significantly as the company also rolls out an increased number of gaming tables at its refurbished casino.

Foolish takeaway

While there is no guarantee that these companies will be able to sustain their growth long-term, their performance over the last couple of years and current forward outlook is certainly positive. If they can sustain a 15% annual compounded growth rate, they could be on their way to doubling profit in the next five years.

The post 4 companies that could double in the next 5 years appeared first on The Motley Fool Australia.

It is therefore essential that investors consider likely earnings growth when investing. However, growth alone is only part of the equation. To quote Buffett again [my emphasis], "business growth, per se, tells us little about value. It's true that growth often has a positive impact on value, sometimes one of spectacular proportions. But such an effect is far from certain."

And what is the main (but not only) factor that decides whether growth has a spectacular impact on value? "Growth benefits investors only when the business in point can invest at incremental returns that are enticing," says Buffett. As a starting point for further research, here are six companies that are likely to grow profits over 10% in FY2014, and will likely be able to reinvest some of those profits at enticing returns.

M2 Group Ltd (ASX: MTU) is an asset light telecommunications company that in large part just resells internet connectivity to retail customers. The company is quite indebted, and its assets are largely intangible. Over the last year, M2's share price has drastically under-performed compared to telcos with less debt and better assets, such as Vocus Communications Limited (ASX: VOC) and TPG Telecom Ltd (ASX: TPM).

In comparison, there's no doubt that M2's business has not performed well. Indeed, it is quite ironic that the share price is now lower than six months ago, despite the fact that the business is better: the acquisitions have boosted earnings, and the company has started to pay down debt. For the first half of FY 2014 profit was up about 25%, thanks mainly to recent acquisitions. This nearly guarantees earnings growth of over 10% in 2014, and it's likely that acquisition synergies and organic growth will allow the company to grow earnings by at least 10% per annum for the next few years at least.

CSL Limited (ASX: CSL) is a $32 billion company that provides blood plasma products designed to treat a range of diseases. By and large, demand increases with an ageing population, and CSL's constant innovation allows it generate sales from new products. The company's distribution network and intellectual property give it a competitive advantage, and the ageing population affords it a long-term tailwind.

In the first half of FY 2014, the company was only able to grow profits by 2% on a constant currency basis – so how could earnings per share grow 10% this year? The answer is by buying back shares. In order to return capital to shareholders, the company uses its formidable cashflows to purchase its own stock. Personally, I think that it shouldn't be buying shares when they are expensive, so I would view it as a positive for long-term holders if the share price continues to fall. The forecast is for 7% earnings growth over FY 2014 but combined with share buy backs, the total earnings per share growth should be at least 10%.

Software company Global Health Limited (ASX: GLH) provides electronic medical record software (as a service) to psychologists, psychiatrists, and other allied health professionals. In addition to that, it also provides software to a number of hospitals, although growth in that business is a bit harder to come by.

Global Health is likely to grow earnings by well over 10% because of operating leverage (it has only recently become profitable) and because electronic record keeping makes life easier for health professionals. Revenues are fairly sticky, and as long as the company continues to win new customers earnings should grow for years to come. In any event, the first-half profits strongly suggest the company will see profit growth of at least 15% in FY 2014. Traders, speculators and bandwagon investors are selling their shares as a result of the broader tech sell-off and the loss of share price momentum, not because of a change to the business itself. In my opinion, this gives long-term investors an opportunity to buy shares at the reasonably attractive price of 59c (though I'm holding out for a lower price).

Foolish takeaway

I think these three companies are fairly attractively priced. Indeed, a few months ago I bought shares in Global Health at 57.5 cents each, though my average buy price is considerably lower. M2 telecommunications has seen its share price bounce 2.5% today, but if the sell-off continues a bit longer, I could easily see it becoming a compelling buy. Meanwhile, CSL Limited has some way to fall before I'd consider buying shares, but it's hard to go past for investors looking for a blue-chip stock. Of these companies, I believe Global Health and CSL will find it easiest to continue to profitably reinvest in their existing businesses.

The post 3 stocks primed for over 10% sustainable EPS growth appeared first on The Motley Fool Australia.

Many investors take a conservative approach and value safety above all else. Some are just too lazy to even think about it and invest in the same old companies, such as Commonwealth Bank of Australia (ASX: CBA). But a few of us are prepared to roll the dice and take our chances investing in up-and-coming growth stories.

If you're like me and willing to invest in small, profitable businesses then you should get to know these names:

Donaco International Ltd (ASX: DNA) is a hotel and casino owner/operator with its key asset in Lao Cai, Vietnam. It has a market capital of $538 million and a price-earnings ratio of 50 but will grow both revenues and earnings significantly in coming years, on the back of a huge renovation and acquisitive growth.

Collection House Limited (ASX: CLH) presents an appealing investment case for a number of reasons. Firstly, demand for credit is growing rapidly and this debt collector is in prime position to benefit. Two, it has a strong balance sheet enabling it to pay a juicy 4.3% dividend. Lastly, it's priced to please.

Slater & Gordon Limited (ASX: SGH) is law firm with nationwide exposure and expertise in personal injury services. After a slight setback in share price it's now even more enticing to potential investors. Its three-pronged growth strategy (including ongoing personal injury services growth, tapping the UK market and expansion into personal legal services) should result in increased revenues and earnings over the next five years.

Greencross Limited (ASX: GXL) is a veterinary services provider which is in a period of rapid growth. It's aggressively acquiring practices to consolidate the Australian market. It currently controls around 5% with a view for 20% market share in the future. Its share price has retreated recently, possibly because many investors may feel it got ahead of itself.

For the company to be ultimately successful its vital senior management conduct their due diligence and uphold stringent valuation criteria when assessing potential acquisitions to maximise shareholder value. Growth for growth's sake has proven to be extremely risky to shareholders' wealth in the long-run. Despite that however, it remains a worthy addition to growth portfolios.

Global Health Limited (ASX: GLH) is the smallest company on the list but that doesn't necessarily make it the riskiest. It's a developer of cloud-based software for medical professionals. Contracts with customers span years, not months, and its services are of a type such that its revenues and earnings could be sling shotted upwards if it benefits from a network effect in the medical community. As Motley Fool Contributor Regan Pearson points out, its share price is undemanding.

Foolish takeaway

Market volatility enables small "riskier" companies like these to be offered up at discounts to their recent highs. Now is the perfect time to take on a little extra risk and bag-a-bargain.

The post Do you know these 5 TOP growth stocks? appeared first on The Motley Fool Australia.

It's a sage reminder to be wary of the hype that can surround exciting growth companies, and that 'growth at any price' is not a sustainable investment theory. However for these three companies the falls could be a good opportunity to buy.

Coca-Cola Amatil Ltd (ASX: CCL)

Coca-Cola Amatil shares had dropped 14.5% by the end of Friday after announcing an expected 15% fall in half-year earnings on weak consumer conditions. The drop pushes shares to a level not seen since 2009. It is hugely disappointing for current investors, but may also provide an opportunity to buy for the long-term recovery.

Coca-Cola Amatil still has an enviable brand and distribution network, while the growth potential for Indonesian consumers still offers hope for long-term earnings growth.

ResMed Inc (ASX: RMD)

ResMed's 1.23% fall on Friday brings the company's drop for the year to 8%, extending the slump the company has faced since reporting soft growth in the U.S for the first half of FY14. However ResMed is still growing in many of its other international markets and continues to return value to investors through a long-term share buyback program.

Global Health Limited (ASX: GLH)

The 14% sell down in shares of Global Heath Limited fails to take into account two important factors. Firstly; that the company is generating profit and expecting to grow full year net profit after tax by as much as 55% for the full year, and secondly; that Global Health is not a company that commands lofty valuations like others in the tech and cloud sector.

Global health can now be picked up at a forecast forward price to earnings ratio of around 11, which to me suggests good value for a growing company.

Foolish takeaway

Last week's sell offs came as a rude surprise for many investors, but it has also opened up several opportunities to acquire quality businesses at reasonable prices. Coca-Cola Amatil, ResMed and Global Health Limited are three to consider buying this week.

The post 3 stocks that fell last week to buy this week appeared first on The Motley Fool Australia.