Once a month, I host a live webinar and Q&A session with my subscribers.
I can’t tell you how much I love speaking directly to subscribers, answering their questions, kicking ideas around.
This time, I got asked about a huge merger in healthcare between two companies I recommend.
The two happen to be up an average of 357% since I recommended them.
I think I got a little carried away in my answer. I said the combined company was basically the Google (NASDAQ:GOOGL) of its booming industry.
Actually, I don’t think I did get carried away…
It was already the future, as technology advancements like the 5G superhighway enable real-time communications and monitoring by health providers. One of the lasting impacts of the pandemic will be how it kicked telehealth into overdrive.
I’ve recommended the telehealth leader, Teladoc Health (NYSE:TDOC), for almost two-and-a-half years in my Investment Opportunities service. It’s been a great stock, gaining more than 400% in that time.
You can see on the chart how the stock really took here in 2020. Growth surged as people stayed home during the pandemic but still needed doctor’s appointments. The company reported 2.8 million virtual visits in the second quarter, more than 3X the year before. Revenue jumped 85%. Paid membership soared 92%. Management raised guidance.
Even with the big gains, the future was bright.
Now … it’s even brighter after merging with Livongo Health (NASDAQ:LVGO), which is up over 290% since I recommended it in Early Stage Investor last August, about a month after it went public.
Livongo adds remote monitoring to the company’s arsenal. It takes the management and treatment of chronic diseases into the next generation. By using connected smart devices, Livongo implements personalized digital guidance and provides continuous access to healthcare professionals treating patients with diabetes and other chronic diseases.
According to the CDC, more than 100 million U.S. adults have either diabetes, or prediabetes. The total addressable market (TAM) is huge for that alone. Add in other chronic diseases and now telehealth visits with the merger and the TAM becomes massive.
Interestingly, both stocks hit new all-time highs the day before the deal was announced … and then both fell on the news. That’s why I said at my subscriber get-together that this company creates a telehealth, virtual health, remote health juggernaut. So yes, I would say it is the Google of that industry.
So, what gives?
The acquiring company (Teladoc in this case) typically drops after a merger is announced while the acquiree usually goes up. However, both fell because a large portion of the deal is based off Teladoc’s stock price.
Whatever.
I couldn’t care less about day-to-day fluctuations in stocks. I look at the big picture, and with two telehealth leaders combining to form an absolute juggernaut, the long-term outlook is extremely bullish. Teladoc’s dominant market share combined with Livongo’s business model of helping people at home with chronic disease is a win-win.
I love this deal for both companies. This is the future. And the newly combined company of Teladoc and Livongo is the clear leader in this hypergrowth trend.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.
