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There's no stopping it, not that you'd want to: The "autonomous world" is advancing at warp speed.
From self-driving delivery pods to automated factory lines, we're seeing technology roll out that basically runs itself.
Today, I want to talk to you about another dimension of this new paradigm: autonomous pharmacies.
These automated systems can have a huge impact on an expensive and deadly medical problem - adverse drug interactions, which cause some 1.3 million hospital admissions each year in the United States alone. That's about 40% of all hospital visits annually.
The med-tech firm I have in mind for you is a leader in a sector Research and Markets says will more than double in the next five years to $35.5 billion.
No wonder its stock gained some 54% over the past year.
Let me show you why it's poised to double earnings - and why its stock price will follow...
This Medical Catastrophe Unfolds Quietly
Adverse drug events, which is when a medicine ends up causing harm, are a "silent" drug crisis.
It hits the elderly especially hard, with as much as seven times the hospitalization rate of younger people. The reason is simple: older adults tend to take more medicines, and so are more likely to be negatively affected by a medicine, or by the way certain medicines can interact.
The damage is horrific: "adverse events" kill an estimated 125,000 people annually, mostly seniors, and costs the nation some $300 billion a year.
This health crisis is why I want to talk about Omnicell Inc. (NASDAQ: OMCL), a company pioneering the autonomous pharmacy. The firm's central idea is simple: Automate all the menial, administrative, and error-prone parts of running a pharmacy, freeing up time for pharmacists and others to actually focus on patients and their health.
This Software Offers "Smart Safety"
Though the firm's idea is simple, solving this issue is very hard. That's why Omnicell's platform is so impressive.
Through a mix of hardware and software, Omnicell makes it so every dose of every medication issued by a pharmacy is tracked individually, from packaging and labeling, through the prescription process, all the way to being given to the patient.
Automated software makes sure to check for any potential adverse drug interactions among a patient's various prescriptions. Plus, the company's machines make the packaging and labeling of drugs easy to use and track using barcodes, which cuts down on human error.
This has allowed Omnicell to dispense 10 million medications, with not a single one being wrong. And in hospitals that use Omnicell, the number of pharmacist checks to make sure the paperwork and labeling are correct has dropped by 90%.
This frees them up to do what they are actually trained for - helping find the right drug for the right patient, not fill out forms and fill bottles.
No wonder Omnicell boasts exclusive partnerships with 151 of the top 300 U.S. healthcare systems. No wonder more than 90% of the firm's customers stick around.
Gradual and Unstoppable Profit Potential
This business model is not just good for patients and healthcare providers. It's also very lucrative.
About 63% of Omnicell's revenue comes from connected devices and software licenses. Another 31% comes from recurring technical services. Software subscriptions account for the remaining 6%.
That last segment is where Omnicell plans to grow, taking that 6% number to 20% to 30% by the end of 2025, as it moves its software into the cloud. This will allow for more features and easier use for customers, and more revenue sources for Omnicell.
As investors, we like recurring revenues like these, as they're baked in for the long haul and have higher profit margins than single-use sales.
Omnicell's management forecasts sales will grow from $1.1 billion in 2021 to $2 billion in 2025. That's a compound annual growth rate of 14% to 15%.
I expect we'll see continued outperformance. In fact, in the most recent quarter, earnings grew 80%. Even by conservative estimates, we're still likely to see earnings double in less than three years, far ahead of some estimates of stock market growth.
Add it all up, and you can see this has "winner" written all over it. In the past year, the stock has gained roughly 47%, more than double the S&P 500's historic 27% gain.
So, by investing in a company that helps save lives lost from medical mistakes and bad drug practices, you are also locking in long-term wealth. It's a win-win, and for me, a must-buy.
The "autonomous world," the metaverse, the "Internet of Things" - as impressive as tech's performance has been, it's nothing compared to what I think is coming just around the corner - in an $8 trillion tech revolution.
I'm talking about quantum computing - an entirely new way to process data. Quantum computers can crunch data as much as 158 million times faster than classic machines. Now, this will likely make your computer obsolete - it will probably disrupt every industry on Earth, in fact - but the really good news is I'm projecting this computing revolution will generate $8 trillion in new wealth over 2022 and beyond. Investors who move now, though, can grab a "ground-floor" stake in this game-changing tech - here's how...
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.