The novel coronavirus refuses to die. And while it has taken a terrible toll, a side effect has been a boost to telehealth stocks.
Just over the last few days, the world saw another 183,000 new cases, according to the World Health Organization. Brazil reported 54,771 cases in a day. India reported an increase of 15,400 new cases. The U.S. reported another 36,617.
In the U.S., there has been an explosion of cases in several states, including Texas and Florida. Worse, according to former US FDA Commissioner, Dr. Scott Gottlieb, some U.S. states may be “on the cusp of losing control.”
“The question is ‘can we keep this from getting out of control.’ This is a virus that wants to infect a very large portion of the population,” Gottlieb told CNBC. “They’re on the cusp of losing control of those outbreaks in certain parts of those states. Arizona, Houston, Austin, parts of Florida certainly look very concerning right now.”
As a result, a good number of hospitals and other healthcare providers turned to telemedicine.
“The critical need for social distancing among physicians and patients will drive unprecedented demand for telehealth, which involves the use of communication systems and networks to enable either a synchronous or asynchronous session between the patient and provider,” said Victor Camlek, healthcare principal analyst at Frost & Sullivan, as quoted by Healthcare IT News.
The last time we spoke about telehealth stocks was March 25, when we highlighted the following opportunities.
Here’s more on why I think these three, in particular, are still worth a place on your watchlist.
Telehealth Stock: Teladoc Health (TDOC)
My first pick was telehealth and telemedicine stalwart Teladoc Health. In the original article, I noted, “I wouldn’t be shocked if shares of the viral health care provider soared to $200 per share. All as it links patients with medical professionals by phone or computer.”
That was on March 25, as the TDOC stock traded at a low of $134.13. As of June 22, the stock hit an intraday high of $208.63. From here, I strongly believe Teladoc could hit $250, as the virus forever alters the way we visit with our doctors.
To date, Teladoc is seeing monumental demand for its telehealth services.
“In the first quarter of 2020 alone Teladoc Health delivered two million medical visits to people around the world, while simultaneously expanding access to millions of new members,” said Jason Gorevic, chief executive officer. “As our clients and consumers have turned to us during these unprecedented times, our proven ability to meet their needs has elevated our global leadership role and accelerated our impact on the healthcare system overall.”
Analyst consensus is a buy, with no sell recommendations.
We also brought Anthem to your attention as a telehealth opportunity on March 25. At the time, the ANTM stock traded at just $186.45. As of June 22, it’s up to $264.
With the massive demand for the offerings of telehealth stocks, I wouldn’t be shocked to see Anthem closer to $310 a share.
Anthem’s Live Health Online, for example, helps patients consult with health professionals concerned about the coronavirus. The program costs $59 or less per visit and allows users to “get expert advice, a treatment plan and prescriptions if needed.”
The company also just introduced new digital tools that provide in-depth telehealth services, and an AI-driven symptom checker.
Here as well, analyst consensus is a buy, with no sell recommendations.
CVS Health (CVS)
On March 25, CVS stock traded at $52.27. It’s now up to $63.70, and could easily race to $75, near-term. It’s very clear why that’s a strong possibility.
In May 2020, the company saw a 600% jump in its telehealth services. “Utilization of telemedicine for virtual visits through MinuteClinic is up about 600% compared to (the first quarter of 2019),” CVS chief executive Larry Merlo told analysts.
The company also saw a big surge in home-delivered prescriptions.
“When facing any health crisis, including this pandemic, we’re uniquely positioned to understand consumer and patient needs and how to address them,” Merlo said in a release. “This includes increasing access to medicine and virtual care, and testing thousands for the virus every day to ready our country to reopen safely. We’re utilizing our innovation-driven health care model, scale and unique capabilities to benefit consumers across the health care system, and none of this could be done without the tireless dedication of our colleagues.”
Here, too, analyst consensus is a buy, with no sell recommendations.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.