Talking about the gains a stock has already given investors can be like looking in the rearview mirror - unless those gains are going to be repeated, or even look small compared to the gains ahead.
Like with one of my favorite "breakthrough" stocks of the year that I'm going to show you today.
This firm is a leader in the medical device market, which is benefiting on the trend toward remote patient monitoring. This is one of the areas of medical technology that's been supercharged by the COVID-19 pandemic.
Shares shot up 120% from March to May of this year, as cases first started surging in New York.
But this is not just a COVID-19 testing play. From early 2019 through this past February's correction, this stock was outperforming the S&P 500 by an astonishing 278.5%.
And I still see plenty of upside ahead for this market crusher, based on the firm's long-term growth and augmented by its new pandemic-related sales...
Tech to the Rescue Yet Again
President-elect Joe Biden is urging Americans not to travel during the holidays as the coronavirus continues to surge. Indeed, several states are already reporting a shortage of hospital beds.
In North Dakota, for example, an acute shortage of healthcare workers has led the state to allow nurses with COVID-19 to keep working, as long as they don't have any symptoms and work only in COVID-19 wards.
With personal protective equipment (PPE) shortages still happening, nurses and doctors risk getting infected every time they interact with a COVID-19 patient.
That's where our CGM 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, CGMs take a new reading every five minutes. And they do it automatically, without a nurse having to make contact with the patient to draw a new sample each time.
That makes these CGMs indispensable for the many hospitals across the country now packed with COVID-19 positive patients.
Everyone with diabetes needs consistent blood sugar monitoring, but for those who are also hospitalized, the need is even greater because disease can drastically affect blood sugar levels. During a pandemic like this one, that poses a huge risk to the nurses who would have to manually draw blood several times a day for each patient to check their sugar levels.
And this applies to a lot of COVID-19 patients right now. Earlier this year, the CDC estimated that almost one-third of those hospitalized with the novel coronavirus also had diabetes.
By using this company's wearable blood sugar monitors, hospitals hope to curb transmission of COVID-19, protect healthcare staff, and conserve the unfortunately scarce supply of protective gear.
Buy This Leader in Med-Tech
The company in question is DexCom Inc. (NASDAQ: DXCM), founded in 1999 and headquartered in San Diego, Calif.
Its CGMs work by way of a tiny sensor wire getting inserted under the skin of the patient, and wirelessly transmitting in real-time dynamic glucose information to a smartphone application or receiver device.
Shah Gilani: "I'll show you what to consider buying, what to sell, and exactly HOW to do it with less than $500."
The devices send out the data every five minutes, resulting in up to 288 readings in a 24-hour period and saving healthcare staff a great amount of time.
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-19 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 e-mail the reports, which comes in handy when changing doctors.
DexCom currently treats patients that are on intensive insulin therapy in 47 countries. In the United States and Europe alone, that accounts for about 6 million people.
The company is working on new products targeted at treating people with early-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 500 as a whole.
I was able to recommend DexCom to my Nova-X Report Members for a gain of 143% that we closed out recently, using my unique Cowboy Split staggered entry strategy to great effect.
Basically, we smashed the broader markets.
And as I already mentioned, 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 the healthcare sector as elsewhere.
But with med-tech leaders like DexCom, that wealth comes with the crucial advantage of saving people's lives.
Not only that, but the future is still full of emerging firms like DexCom with the potential to score similar market-crushing gains.
And DXCM isn't the only profitable stock to make room for in your portfolio...
You see, my colleague and Money Morning Chief Investment Strategist Shah Gilani knows that 2021 could be the start of a generational stock buying opportunity. So he's showing you which stocks you should consider buying NOW and which to sell ASAP.
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About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.