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small-cap

Should You Exit This NYSE-Listed Health Care Stock - RVP

Apr 12, 2022 | Team Kalkine
Should You Exit This NYSE-Listed Health Care Stock - RVP

 

Retractable Technologies, Inc.

Retractable Technologies, Inc. (NYSE: RVP) manufactures and distributes VanishPoint and Patient Safe safety medical products and the EasyPoint needle. VanishPoint syringes, blood collection devices, and IV catheters are designed to reduce needlestick injuries and product reuse by extracting the needle immediately from the patient and successfully decreasing exposure to the contaminated needle. Patient Safe syringes are made to prevent bloodstream infections caused by contaminated catheter hubs. The simple point is a retractable needle that can deliver injections with a Luer lock, Luer slip, and prefilled syringes.

Why Should Investors Make An Exit?

  • Weak Liquidity Profile: The company's current ratio at the end of FY21 is 2.96x, compared to the industry median of 3.72x. This implies relatively lackluster liquidity profile against the industry median.
  • Supplier Concentration: Purchases from Chinese manufacturers accounted for 92.0% and 85.2% of RVP's total purchases in FY21 and FY20, respectively. As a result, delays in receiving the required quantity or unfavourable pricing from Chinese manufacturers may cause output to be distorted, compromising the company's overall operational situation.
  • Technical weakness: On the daily chart, RVP price is trading below the downward sloping trend line and facing the resistance of the same. Furthermore, the momentum oscillator RSI (14-period) is trading at ~46.17 level, trading in negative territory. On the weekly chart the prices are trading below the trend-following indicators 50- period SMA, which may act as a resistance level for the stock. An important support level for the stock, is placed at USD 4.00 while the key resistance level is placed at USD 4.90.

Stock Recommendation:

RVP's share price has declined 59.26% in the past nine months and is currently leaning towards the lower band of the 52-week range of USD 4.26 to USD 13.91.

Considering the company's weak liquidity profile, current valuation and associated risks. we recommend a "Sell" rating on the stock at the current price of USD 4.49, down 1.10% as of April 12, 2022, at 08:07 AM PDT.

                

Three-Year Technical Price Chart (as of April 12, 2022, at 08:07 AM PDT). Source: REFINITIV, Analysis by Kalkine Group

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.