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There's a revolution going on in life sciences right now.
We're talking about an emerging treatment that can already cure 75 diseases, including red blood cell disorders, sickle cell anemia, immunodeficiency disorders, and malignant tumors.
And it might not be long before you can add diabetes, liver disease, and nerve deficiencies to the list.
With global healthcare expenditures set to exceed $10 trillion in 2022, according to Deloitte, the few companies that can provide this lifesaving treatment are going to reap major windfalls.
In fact, one small-cap stock we're bringing you today is due to triple in value, based on multiple valuation figures.
This company controls more than 40% of the existing Chinese market for this groundbreaking treatment, with a potential market of 2 million clients per year.
Even better, it just got a top score from our Money Morning Stock VQScore™ system.
All that makes this stock to buy the top choice to capitalize on this lifesaving trend...
750,000-Plus Clients Trust This Firm to Save Their Lives - and That's Just the Beginning
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]You've probably already heard about the medical uses of stem cells. But you might not know about the easiest, most efficient way to get access to them: through "cord blood" taken from a newborn's umbilical cord.
Global Cord Blood Corp. (NYSE: CO) is a leader in the storage of cord blood. It holds three of the seven licenses that have been given out in China for this purpose, covering Beijing, Guangdong, and Zhejiang.
About 2 million babies are born each year in those areas. Expectant mothers concerned about the long-term health of their children can sign up to have the cord blood stored for an initial contract period of 18 years.
If those children grow up to have one of the 75 diseases currently treatable by stem cell implants, not just any stem cells will do. If the cells aren't an "HLA" match (that stands for "human leukocyte antigens"), the body won't accept them.
Siblings have about a 25% chance of being a match. For unrelated humans, the chance of a match could be as low as one in 10,000.
So the painless procedure of storing a newborn child's umbilical cord blood is a tremendous insurance policy against the many diseases that can be treated with stem cells.
Plus, the untapped potential of stem cell treatment means that by the time the child grows up, there could be dozens more diseases that are treatable with matching cord blood.
GCBC opened its first storage bank in 2003, with two more added in 2007 and 2011. Because this is a relatively new venture, the bulk of revenue currently comes from the initial processing fees from new clients.
But while that revenue is growing about 9% per year, revenue from storage fees is climbing almost twice as fast.
The reason, of course, is that as new clients sign up, they pay storage fees for decades.
GCBC is up to more than 750,000 subscribers as of June 2019. With growing awareness of the benefits of cord blood storage, and more than 350 collaborating hospitals in China, this is a company with tremendous potential for growth.
And right now is the perfect time to buy...
Now Is the Time to Buy CO
In addition to revenue growing by double-digit percentages every year, Global Cord Blood Corp. has put up impressive earnings growth in recent quarters.
Earnings per share last quarter beat the year-before quarter by 33%. The quarter before that, it was 175%. And with a subscriber base that has grown more than 50% in the last three years, you can expect substantial earnings growth for years to come.
And yet, CO's stock price - currently under $5 per share - has not kept up with the fundamentals.
The company's price/earnings ratio for the last 12 months comes in at just 11.46, compared to an industry average of 35.22. That means CO's share price would have to multiply threefold to be in line with its peers.
That's not an outlier, either. CO's price-to-book ratio also comes in at just a third of the industry average.
No wonder this stock earned a top score.
Between the incredible growth prospects of cord blood stem cells and the steep discount in CO's stock price, this pick is a no-brainer for smart investors.
About the Author
Stephen Mack has been writing about economics and finance since 2011. He contributed material for the best-selling books Aftershock and The Aftershock Investor. He lives in Baltimore, Maryland.