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Teladoc: "Doctor in your Pocket"

12/07/2017 5:00 am EST


Mark Skousen

Editor, Forecasts & Strategies, High-Income Alert

Mark Skousen and Jim Woods are two of the advisory industry's leading experts; they have recently joined together to co-edit the specialized trading service, Fast Money Alert. Here, the two look at a play in telemedicine.

Teladoc (TDOC) is the leader in an industry called telemedicine, or telehealth. If you don’t know what that is, don’t be upset. It’s a relatively new field that merges online video technology and smartphone app technology with medical care.

The goal of telemedicine, and the role Teladoc plays, is to help provide cost-effective and far more convenient medical technology solutions for a host of traditional in-office medical services.

Think of Teladoc as a facilitator of online doctor visits and consultations, done from the convenience of your desk or smartphone, and in as little as 10 minutes.

Another way we like to describe it is Teladoc gives you a “doctor in your pocket.” The time savings and convenience of such a service are obvious, but what’s more important is that many large health insurers, plan providers and companies are using Teladoc.

The company now has some 7,500 clients, including 30 health care plans and 220 Fortune 1,000 companies. That impressive and growing roster has helped Teladoc’s revenue grow at a compounded annual growth rate of 80% between 2013 and 2016.

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And while the company’s earnings in the most-recent quarter were still a loss of 55 cents per share, that loss came on revenue of $68.7 million in the period, firmly above estimates for just $67.5 million in the quarter.

Perhaps more important for this service is the fact that the fast money loves TDOC. Its shares are up some 98% over the past 52 weeks, performance that’s outpaced 93% of all other publicly traded stocks over the same period.

So, what happened that sent TDOC shares up 24% in the week ended Nov. 24th?  The answer is the company really impressed during last week’s investor and analyst day.

Teladoc reportedly detailed plans to expand its reach into new markets, targeting the back-to-school season and specifically the treatment of childhood illnesses. The company also has released a series of videos demonstrating the ease of receiving medical attention through its technology platform.

The result of the Teladoc presentations to analysts were very positive, with several analysts issuing bullish comments and/or raising their price targets on TDOC. This is the kind of thing the fast money notices, hence the recent surge in the shares. This is a surge we expect to continue, and that means an opportunity to profit in this service.

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