I’m a huge fan of under-the-radar stocks with explosive potential. Occasionally I come across a company like Senseonics Holdings (NYSEAMERICAN:SENS) which the trading community really hasn’t picked up on yet. As I see it, SENS stock deserves to be much higher.
InvestorPlace contributor Mark R. Hake might agree with me on this, as he’s gone so far as to suggest that Senseonics’ share price could rise five to ten times over the next five years.
Now don’t get too excited and pour your life savings into SENS stock. It’s a fast mover, and it moves in both directions.
As a result of the stock’s volatility, investors should only buy small amounts of it. Yet SENS stock may be able to climb, as the company has an ambitious business and is operating in a crucial, growth-oriented niche market.
A Closer Look at SENS Stock
Want to know how fast SENS stock can move in a single day? Okay, check this out.
April 26, 2021 was a normal day with no specific news pertaining to Senseonics or the health care sector in general. Yet the company’s shares gained slightly more than 9% on that day.
Such moves are actually not too unusual for penny stocks, which are defined by the U.S. Securities and Exchange Commission as names that are trading for less than $5.
The bulls did, however, attempt to push SENS stock out of penny -stock territory in February. In fact, on Feb. 16, they managed to get the share price up to a 52-week high of $5.56.
By April 26, however, the stock was back down to $2.18. Yet that shouldn’t matter too much if you have a bullish, long-term outlook on Senseonics.
Well-Positioned in a Growing Market
To understand why someone might want to buy and hold SENS stock, it’s important to understand what makes the company unique.
So let’s backtrack for a moment. To put it simply, Senseonics is a medical device maker. The company’s main product is a continuous glucose monitoring (CGM) system called Eversense.
That might not sound like a big deal. Yet, right on the company’s home page, Senseonics lets visitors know that Eversense is the only FDA-approved, long-term continuous glucose monitor.
Now that’s a significant differentiator. Just that fact alone should convince the skeptics that SENS stock ought to be far above $5.
Besides, Senseonics is in a fast-growing market. According to Markets and Markets, the sales of diabetes care devices are projected to reach $4.3 billion by 2025, signifying a compound annual growth rate (CAGR) of 16.2% during the forecast period of 2020 to 2025.
Unfortunately, an increase in the diabetic population may be a contributing factor to the market’s future expansion.
Still, it’s encouraging to know that Senseonics is working diligently to market a uniquely positioned product that could help to combat the problem of diabetes.
Goodnow Feels Good Now
It’s fair to say that diabetes is an issue that’s global in scope. Therefore, it’s perfectly reasonable for Senseonics to market its chief product to the European market.
And indeed, that’s what the company is doing now. As Senseonics reports, the Eversense XL is “the only [continuous glucose monitoring system] providing continuous glucose readings for up to 180 days with a single sensor in persons age 18 and older in the European market.”
The company is collaborating with a Swiss company, Ascensia, to distribute Senseonics’ 90-day and 180-day sensors throughout Europe.
Senseonics President and CEO Tim Goodnow is justifiably proud of the company’s expansion into the European market.
“We are confident our shared goal of bringing our advanced long-term solution to more people with diabetes will be accomplished through Ascensia’s high level of commitment to our products and to patients and healthcare providers,” Goodnow commented.
The Bottom Line
So, is Hake right to believe that SENS stock has the potential to surge 500% or even 1,000%?
At the very least, I’d say that the stock deserves to move dramatically higher.
After all, with a uniquely positioned product and a market that’s in expansion mode, it’s tough to find a health care business with greater promise than Senseonics.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.