The Best Wearable Medical Device Stock to Buy That Isn't Apple

Wearable medical devices are revolutionizing the healthcare field, with the global wearable medical device market set to go from $10.3 billion to $66 billion by 2026.

Now, Apple Inc. (NASDAQ: AAPL) might be the face of this industry, but a much smaller company could be the biggest winner.

Here's why the wearables market will grow to six times its current size in the next six years - and how you can cash in with one wearable devices stock.

The Wide World of Wearables

Wearable devices are a radical technological breakthrough that let us do everything from communicate easier to monitor biological data - all from tools small enough to wear on our bodies.

"Wearable" refers to anything in the realm of wristbands, headgear, implants, and badges containing sensors that transmit useful information continuously to the cloud and other devices.

They can measure biometrics - like the Apple Watch does - or they can deliver location data to our apps, or allow us to pay at a store without reaching into a wallet, among an endless variety of other uses.

best wearable medical device stock

The market potential is so huge because the wearables universe will be populated by many brands with many specializations, a core component to the Internet of things. And the technology is so profound because it produces more data than the world has ever seen.

We'll have tools that fundamentally change the way we address medical concerns since we'll have the opportunity to be more proactive about health. The Apple Watch, for instance, can warn of an irregular heartbeat. Glasses from a company called Aira can guide the blind, and the iTBra is a bra that detects breast cancer.

Apple already jumped into this industry using its smart watch to spearhead its penetration of the healthcare and fitness wearables market back in 2015. In addition to a host of communication features, it's able to track heart rate, steps, and calories over time - a step in the direction of "democratizing healthcare."

Future iterations will no doubt offer more to empower users in their health monitoring. Still, there's so much variety in the wearables market, it's nearly impossible to have an all-in-one wearable device. Apple will want to sell its Apple Watch to complement its branded ecosystem, but there will still be demand for plenty of other functions outside of Apple.

They will be very different, specialized offerings no single device can aspire to alone, which is why medical wearables is set to be such a wealthy industry.

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So while Apple is the biggest name in the field, one company is poised to dominated its own wearable health niche, delivering a product that will dramatically alter the daily lives of hundreds of millions around the world.

The company's been catching fire, with a 289% increase in revenue over the last four years. It pumped almost $200 million into research and development last year, and it's not slowing down.

But this company is still flying under the radar.

That's all going to change very soon, and we'll show you exactly why...

Why This Is the Wearable Medical Device Stock to Own

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Four hundred fifteen million people suffer from diabetes worldwide, but a company called DexCom Inc. (NASDAQ: DXCM) is looking to change their lives in a big way.

DexCom is a U.S. technology provider specializing in continuous glucose monitoring (CGM). The company has grown steadily since it was founded in 1999, with technologies that make it easier to live with the disease.

Until now, those millions have needed to prick their fingers several times daily for a blood sugar reading.

It's not the most painful thing in the world - there's a whole industry in competition for the least-painful finger-pricker. But it's certainly not convenient. That's why the market for diabetes devices comes in at $35 billion, according to Grand View Research.

DexCom's offer is about as simple as it gets: a wearable medical device that communicates with an app on your tablet, smartphone, or smartwatch. That gives you all the data you need without the need for fingerprints or test strips.

This involves a sensor planted just beneath the skin of the abdomen, which transmits glucose levels to a receiver and your other devices.

If that sounds invasive, consider again that diabetics used to stick their fingers and draw blood multiple times a day to perform the same function.

DexCom has worked to increase the longevity of their sensors over the years, now reaching up to 10 days per use. Even DexCom sensors required a finger prick for calibration before the release of their latest DexCom G6 device. Today, it does not. This changes the game.

The company is still pouring money into R&D to improve the sensor's longevity and other aspects of the system. But you've heard enough science - let's talk financials.

Revenue has more than tripled since 2014, according to DXCM's latest annual report, from building on its product and integrating it into a suite of glucose-monitoring tools. DexCom went from $257 million in revenue to over $1 billion - that's adding 289% in those four years. For FY 2019, the company expects to further increase revenue to somewhere between $1.175 billion and $1.225 billion.

Research and development have nearly tripled in that same time, from $69 million to $199 million.

These numbers should tell you the company is doing the right work to get ahead. They also imply that DexCom has a market to serve.

And it does. The Alliance of Advanced Biomedical Engineering expects the diabetes monitoring market will grow to $14.68 billion by 2022 - almost a quarter the size of the entire medical wearable devices market.

DexCom has also increased its cash on hand from $83.6 million to $1.4 billion since 2014. This means it has all the padding it needs to invest in further growth. And because it is pouring so much of its revenue into research, the company is a true breakout candidate.

Wall Street analysts are also excited about this company, predicting shares will reach highs of $180 over the current $112 share price in the next 12 months. That means investors who get in early enough can turn a profit of up to 52%.

But the stock could surge even higher once its device is perfected and begins taking over market share in the diabetes sector.

It's life-and-death for many Americans, making DexCom's continuous glucose monitoring device a revolutionary product that's sure to balance out revenue and expenses for the company over the next few years.

That's why a 52% gain is just the start for this company. Remember, you're getting in early, before the company really launches into orbit.

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About the Author

Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.

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