Why Shares of Semler Scientific Stock Jumped 24.5% Last Month

Source The Motley Fool

Semler Scientific (NASDAQ: SMLR) shot up 24.5% in October, according to data from S&P Global Market Intelligence. The medical device company has started buying up Bitcoin with cash on its balance sheet, which is correlating its stock price to the popular cryptocurrency. Even after the price jump last month, the stock is still down 35.4% in the last five years as it saw slowing revenue and declining operating margins.

Here's why Semler Scientific stock jumped last month.

Adding Bitcoin to the balance sheet

The reason Semler Scientific stock jumped in October had nothing to do with its underlying business. In fact, the company had no material updates to give investors in the month. The only reason the stock rose is because management has decided to put most of the company's liquid assets in Bitcoin. In October, the price of Bitcoin rose to over $72,000, or close to an all-time high. In its recent quarterly update, Semler Scientific told investors that it now owns 1,058 Bitcoins, which equates to a value of $76 million at a Bitcoin price of $72,000.

This is a large portion of Semler Scientific's market value at the moment. As of this writing, the company has a market cap of $219 million, meaning 35% of its value is derived from its Bitcoin holdings. If the price of Bitcoin keeps going up, Semler's stock will keep going up. It's that simple.

How is the healthcare business doing?

Even though Semler Scientific seems to have fallen in love with Bitcoin, the company still operates a medical device segment with its QuantaFlo product, serving the peripheral artery disease (PAD) market. Revenue for the division over the last 12 months is $61.7 million and fell 17% year over year in the third quarter. Declining revenue is never a good thing, and this could be why Semler Scientific has pivoted to investing in Bitcoin.

However, the company is still posting positive operating income, and has been for the last five years. Last quarter, it had a positive operating income of $5.1 million and $22 million over the last 12 months.

On the whole, Semler Scientific has taken a big risk with its business. Investing in Bitcoin can be volatile as the price can move up or down in rapid succession, and it is not guaranteed the company will make money with its operations. For now, its medical device division is generating a profit, but the revenue declines should be a big concern for shareholders. There's no reason to invest in Semler Scientific after its pivot to Bitcoin.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $22,292!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,169!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $407,758!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 4, 2024

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Semler Scientific. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Gold price snaps selling off after fresh Trump comments on tariffsGold price (XAU/USD) is turning positive, recovering above the $$3,300 level at the time of writing on Thursday after two days of firm selling pressure since it topped at $3,500 on Tuesday.
Author  FXStreet
Apr 24, Thu
Gold price (XAU/USD) is turning positive, recovering above the $$3,300 level at the time of writing on Thursday after two days of firm selling pressure since it topped at $3,500 on Tuesday.
placeholder
Gold price surges past $3,300 on trade jitters, yield slump reviving haven demandGold price snapped two days of losses on Thursday and rose $50, or more than 1.50%, amid renewed concerns about the US-China trade war.
Author  FXStreet
Yesterday 03: 51
Gold price snapped two days of losses on Thursday and rose $50, or more than 1.50%, amid renewed concerns about the US-China trade war.
placeholder
Gold price consolidates in a range; bulls have the upper hand while above $3,300Gold price (XAU/USD) struggles to capitalize on the previous day's move higher and oscillates in a narrow trading band during the Asian session on Friday amid mixed fundamental cues.
Author  FXStreet
Yesterday 03: 53
Gold price (XAU/USD) struggles to capitalize on the previous day's move higher and oscillates in a narrow trading band during the Asian session on Friday amid mixed fundamental cues.
placeholder
Gold edges down amid clash over status of US-China trade talksGold price is on the back foot on Friday, almost erasing all of Thursday’s gains, and looks set to close off this week in the red.
Author  FXStreet
20 hours ago
Gold price is on the back foot on Friday, almost erasing all of Thursday’s gains, and looks set to close off this week in the red.
goTop
quote