When betting on an industry of the future, it’s typically a good idea to invest in the leader of that space. That’s the strategy I’m taking when it comes to healthcare.
There is no question that this sector is changing for the better, and one of the trends that’s leading the way is telehealth. In lieu of spending an entire day sitting in the waiting room of a doctor’s office when all you have is a cold, you can now check in with a medical professional from the comfort of your own home.
That’s where Teladoc (NYSE:TDOC) comes in. The company was founded in 2002 with a goal of tackling healthcare’s three biggest issues — access, cost and quality. Today, it’s the leading provider of telehealth medical visits in the country. TDOC boasts being able to connect you with a licensed doctor in under 10 minutes — whether it’s via the phone, internet or mobile app.
The Upside for TDOC Stock Is Endless
According to statistics, there are approximately 1.25 billion ambulatory-care visits in the United States each year. TDOC has the ability to service about one-third (or 416 million) of those visits. Currently, it expects to log 1.9 million-2 million visits in 2018, so it’s clear that the upside potential here is enormous.
Teladoc is already the leader in the telehealth industry, with well over 50% of the market share in the United States. If it can keep growing at this pace, the number of visits could grow by 10-fold in the coming years — and revenue gains should keep pace.
There is also potential in overseas expansion. The company’s acquisition of Advance Medical last month was a step in the right direction.
One area that I believe telehealth could have a major impact on is mental health. The number of people who quietly suffer from mental health issues is higher than most studies suggest. Not only does this boost the client pool for telehealth companies, it will also make it much easier for people to get treatment.
Teladoc brings a lot of new and exciting things to table, and even with the stock up almost 90% so far in 2018 and trading near all-time highs, there remains upside potential to capture. With a market cap of only $4.2 billion, this company could easily be worth $20 billion in the coming years as telehealth becomes more mainstream.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt just launched two new investment advisories focused around the “next” generation investing theme. His trademark three-prong investing approach targets the mega-trends old Wall Street is missing out on. Click here for more information on the “NexGen” Experience.
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