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Monday, November 23, 2020

New Interest Forming in Rennova Health Inc (OTCMKTS:RNVA)

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Rennova Health Inc (OTCMKTS:RNVA) took flight on Wednesday on a massive surge in volume. According to company reports, things have been heating up for this vertically integrated health tech player. Recent financials suggest nearly 390% in y/y quarterly top-line growth leading to over $3.5 million in trailing 12-month sales. Shares may finally be responding in recent days, as trading volume amps up.

To foment that interest, the company also just announced that it has entered into a definitive asset purchase agreement to acquire an acute care hospital in Jamestown, Tenn. According to the release, “the hospital known as Tennova Healthcare – Jamestown, and its associated assets are being acquired from Community Health Systems, Inc. (NYSE: CYH). The transaction is expected to close in the second quarter of 2018, subject to customary regulatory approvals and closing conditions.”

Rennova Health Inc (OTCMKTS: RNVA) promulgates itself as a vertically integrated Public Company that provides industry leading Diagnostics and supportive software solutions to healthcare providers. The company, together with its subsidiaries, provides a suite of healthcare related products and services to healthcare providers in the United States.

The company operates in three segments: Laboratory Services, Supportive Software Solutions, and Decision Support and Informatics Operations. It provides toxicology, clinical pharmacogenetics, and esoteric testing services.

The company also offers Advantage, a HIPAA compliant software; Clinlab, a Windows-based Web-enabled laboratory information management system; and Medical Mime, a suite of solutions, which include an optimized Electronic health records (EHR) for substance abuse and behavioral health providers, a dictation-based ambulatory EHR for physician practices, and advanced transcription services. In addition, it develops and markets interpretation and decision support solutions that enhance cancer diagnoses and treatment through actionable data analytics and reporting for oncologists and their patients. Rennova Health, Inc. was founded in 2005 and is headquartered in West Palm Beach, Florida.

According to company materials, “Rennova provides industry-leading diagnostics and supportive software solutions to healthcare providers, delivering an efficient, effective patient experience and superior clinical outcomes. Through an ever-expanding group of strategic brands that work in unison to empower customers, we are creating the next generation of healthcare.”

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As noted above, this healthcare tech player just announced that it has inked a deal to acquire an acute care facility in Tennessee. Shares have been seeing a huge influx of interest, but not a lot of upside until we saw the vestiges of a possible breakout. If there is any concern here, it’s that the news and numbers look way too good for a stock that has been this week. That’s either an opportunity or a major cause for concern. And unfortunately, only time will tell.

“This acquisition further demonstrates our commitment to expanding Rennova’s rural hospital model to provide necessary services to patients while securing more predictable recurring revenues,” said Seamus Lagan, CEO of Rennova. “This hospital is approximately 38 miles (less than a one-hour drive) from our current hospital in Oneida and will benefit by receiving patients from Oneida that require operations and treatment not provided there. The synergy of management and services in a close geographic location creates numerous efficiencies for Rennova and will allow us to support a greater number of health care providers and residents in the local area.”

We’ve witnessed 13% tacked on to share pricing for the company in the past week, but that move comes in the context of a larger bearish trend. This is emblematic of the stock. RNVA has a history of dramatic rallies. What’s more, the name has seen a growing influx of trading interest, with the stock’s recent average trading volume running nearly 970% above its longer-run average levels.

This is particularly important given the stock’s tiny float of just 4.4 million shares. A small float can be extremely important to understanding the action. It’s simple supply and demand: as interest grows, a supply shortage in shares can force what amounts to a squeeze in the stock.

Now commanding a market cap of $0.1M, RNVA has virtually no cash on the books, which is balanced by about $9M in total current liabilities. RNVA is pulling in trailing 12-month revenues of $3.5M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 387.7%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $RNVA stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $RNVA, either long or short, and we have not been compensated for this article.

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