Five years ago, I quit drinking.
I did so not because I had a problem, but in order to shed some weight. And I was lucky – after I stopped drinking, the pounds just seemed to melt away.
I know most folks aren't that fortunate. That's why dieting and exercise in the United States is a $60.5 billion industry.
The party season surrounding Thanksgiving, Christmas, and New Year's is rapidly approaching, and so that weight-watching industry is just as quickly ramping up its marketing.
With that in mind, I found us a way to invest in this huge sector – and also stick with our mission to build wealth through technology.
And this company is in turnaround – setting us up with a "special situation" stock with the potential to double in three years…
Welcome to the New "Aesthetic Medicine"
Please – don't think I'm suggesting you invest in some new diet fad. Far from it.
The technology I want to tell you about involves a breakthrough medical device approved by the U.S. Food and Drug Administration, an agency that is always on the lookout for scams.
In fact, the company I have in mind successfully treated more than 4,000 patients during clinical trials.
It also has published more than 40 medical papers and abstracts on its science, which was developed at a teaching hospital affiliated with Harvard Medical School.
And besides the tens of billions of dollars we spend on weight loss each year, there's another number that demonstrates how large this company's market could eventually be.
According to the American Medical Association, more than 75 million Americans are obese. The condition causes a wide range of problems that can lead to premature death, including heart disease or diabetes.
And in addition to the obese, millions more of us are in pretty good shape but would just like to drop a few unsightly pounds. I know from experience that it's hard to get rid of love handles. For women, it's often the hips or thighs that bedevil them.
These are the kinds of cases tailor-made for what's known as "aesthetic medicine," a field that includes everything from plastic surgery to liposuction.
Forecasters at BCC Research estimate that aesthetic medicine is growing at an annual compound rate of 7.4% and should hit $4.8 billion by the end of next year.
Clearly, ZELTIQ Aesthetics Inc. (Nasdaq: ZLTQ) and other aesthetic medicine firms have a great opportunity to do well now and in the future. This growing medical tech firm uses controlled cooling to eliminate unwanted body fat in a nonsurgical, minimally invasive procedure known as Cryolipolysis.
How This New Tech Freezes Fat Away
That's a mouthful. So let me tell you about it.
Simply stated, ZELTIQ freezes away the fat. The company uses a cooling device to destroy fat cells. The device extracts energy from those cells without damaging other tissue.
Cryolipolysis also has no effect on a patient's skin, which means minimal recovery time and no sign of treatment.
Over the course of two to four months, the fat cells in the treated areas are gradually eliminated through the body's normal metabolic processes.
ZELTIQ's CoolSculpting system consists of a control unit and a number of applicators. ZELTIQ derives most of its revenue from sales of the CoolSculpting system and of the applicators doctors use to treat different sizes and shapes of fat bulges.
Additional sales stem from something the firm calls "cycles." These are specific-use procedure packs activated with the CoolSculpting machine. A cycle lasts about an hour, and patients typically need two "cycles" to treat for the arms and up to four to treat stomach fat.
If it executes against its plan, ZELTIQ will see a lot of growth. Based on U.S. Census data and its own consumer surveys, the company says it could hit $2 billion in sales over the next few years. In 2013, ZELTIQ had sales of $111.6 million.
ZELTIQ arrived at that $2 billion number after its surveys projected some 4 million Americans would be ready to receive treatment that would require four cycles at $125 each.
Going public in 2010 amid great excitement about its unique technology in a huge market, the company quickly stumbled. It racked up several quarters of losses, putting the stock under pressure.
To capitalize on its potential, ZELTIQ needed a strong corporate turnaround. And that's just what started happening in 2012 when the board of directors shook up the management team.
Join the conversation. Click here to jump to comments…
About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.
Forecasters at BCC Research estimate that aesthetic medicine is growing at an annual compound rate of 7.4% and should hit $4.8 billion by the end of next year.
That's interesting.
AS BOTH MD AND PhD I AT LEAST HOPE SUCCESS FOR HIGH TECH MEDICINE COMPANIES. THERE ARE SO MANY DISEASES AND HEALTH PROBLEMS WHICH HAVE WAITED MUCH TOO LONG FOR PROMISED
SOLVING, BUT NOW THERE ARE MANY INTERESTING AND HOPEFULLY REALISTIC SOLUTIONS IN THE NEAR FUTURE. THEY GIVE HOPE FOR PATIENTS AND ALSO MAY GIVE SOME ECONOMICAL HELP FOR RISING PRICE FOR HEALTH CARE. HOW LONG AWAY THESE FUTURE HOPES ARE IS ANYWAY UNKNOWN AT THIS MOMENT.
TO BECAME OR NOT TO BECAME. IS THAT THE QUESTION?