A very profitable chat we had back on May 19 is coming up on another chance to pay off right now.
At the time I told you about a medical device leader that had just received approval for a Covid-19 test, and shot up 120% in two months.
But this is not just a COVID testing play. From early 2019 through this past February’s correction, this stock was outperforming the S&P 500 by an astonishing 278.5%.
This firm is a leader in the medical device market as part of a trend toward remote patient monitoring that’s been supercharged by the COVID pandemic.
With the coronavirus surging once again, the investment thesis is only getting better.
Today, I will reveal the name of this market crushing leader and show you why there’s still so much upside ahead…
The Best Is Yet to Come
Now then, back in May, I couldn’t reveal the name of the stock because it was still in the Nova-X Report portfolio.
But we recently closed this position for combined gains of 143%. And I’m telling you this today for two reasons.
First, I believe my monthly tech investing newsletter is great way to super charge your portfolio. We currently have a win rate on all open positions of 85%.
Second, I still see plenty of upside ahead. That’s based on the firm’s long-term growth augmented by its new pandemic related sales.
There’s no question about it. The coronavirus is surging in America again with President Elect Joe Biden telling us not to travel during the holidays.
Several states are reporting that they are running out of hospital beds.
In North Dakota, an acute shortage of healthcare workers has led the state to allow nurses with COVID to keep working, as long as they don’t have any symptoms and work only in COVID wards.
That just shows the huge sacrifices made by healthcare workers on the frontlines of this pandemic. With personal protective equipment (PPE) shortages still happening, nurses and doctors risk getting infected every time they interact with a patient.
That’s where our GCM company is changing the game. See, this company makes continuous glucose monitors (CGM) used by diabetics.
Unlike traditional glucose tests, which only show what the blood sugar level is at the time the sample is taken, GCMs take a new reading every five minutes.
And they do it automatically, without a nurse having to draw a new sample each time.
That makes these GCMs indispensable for the many hospitals across the country now packed with COVID-19 positive patients.
Diabetes puts people at much higher risk of having a severe bout of COVID, and earlier this year, the CDC estimated that almost one-third of those hospitalized with the novel coronavirus also had diabetes.
Everyone with diabetes needs consistent blood sugar monitoring, but for those who are also hospitalized, the need is even greater. Disease can drastically affect blood sugar levels, so constant monitoring is required.
But during a pandemic like this one, that poses a huge risk to the nurses who would have to manually draw blood to check sugar levels, several times a day for each patient.
Each test would be another exposure to the contagious novel coronavirus that causes COVID.
By using this company’s wearable blood sugar monitors, hospitals hope to curb transmission of COVID, protect healthcare staff, and conserve the unfortunately scarce supply of protective gear.
Tech to The Rescue
The company in question is DexCom Inc. (DXCM), and here’s how its GCMs work.
A tiny sensor wire is inserted under the skin of the patient, and wirelessly transmits real-time, dynamic glucose information to a smartphone application or receiver device.
The devices send out the data every 5 minutes, resulting in up to 288 readings in a 24-hour period (a great time saver for healthcare staff).
Under normal circumstances, hospitals wouldn ‘t be ordering these remote monitors because they have yet to be officially approved by the FDA for inpatient use.
However, the FDA realizes that these are trying times. As these devices can help ease some of the pressure healthcare providers are experiencing, the agency is allowing companies to supply them.
That’s a big vote of confidence. But as I mentioned, DexCom is excelling in areas other than just blood-sugar monitoring for COVID patients.
The firm has made a deeper push into software with a new portal that helps users upload and view glucose data. Patients also can save, print, or email the reports, which is an important ability when changing doctors.
Founded in 1999 and based in San Diego, DexCom currently treats patients that are on intensive insulin therapy in 47 countries. In the U.S. and Europe alone that accounts for six million people.
The company is working on new products targeted at treating people with earlier-stage diabetes, a market consisting of 60 million people.
And over the next two years, DexCom plans to deliver $2 billion to $2.5 billion in sales. The firm is aiming for profit margins of 25%, suggesting adjusted earnings of at least $500 million.
Now you can see why DexCom runs rings around the rest of the med-tech sector, not to mention the S&P as a whole.
Still, the 143% gains that Nova-X Report members had the opportunity to score show how I put my unique Cowboy Split staggered entry to great effect with DexCom.
Rather than getting stopped out in March 2019, we doubled down on the stock.
Had we not done so, we would have been stopped out with losses, rather than lining our pockets with outsize profits.
To put things in perspective, the S&P 500 was off 0.75% during the time we held DexCom and made 143%.
In other words, we smashed the broader markets.
And DexCom has plenty of upside ahead. Earnings have been growing by an astounding 260% a year.
But to be conservative, let’s project earnings growth of 64%.
That would still have DexCom stock double in less than two years, even after its previous gains.
As I always say, the road to wealth is paved with tech. That’s as true in healthcare as elsewhere.
But with med-tech leaders like DexCom, that wealth comes with a side of saving people’s lives.
Cheers and good investing,
Michael A. Robinson
Source: Strategic Tech Investor