Insights: Bullish Health Care Stocks
Attractive opportunities within Health Care Services -- buy DXCM and USPHStocks within Health Care Services continue to offer attractive and timely buy opportunities. The combination of having defensive characteristics (low earnings cyclicality), generally being unaffected by the ongoing U.S.-China trade war, and the timeliness of bullish price and RS inflections create what we believe is a compelling case to add exposure to DXCM and USPH at current levels.
• DexCom, Inc. (DXCM): DexCom designs and sells continuous glucose monitoring systems for diabetics - an alternative to the traditional glucometer process. The stock has been basing for almost a full year and is now breaking out. Following the breakout topside $160, the depth of the base suggests a minimum price target of $215. At nearly $15B in market cap, add exposure to this growth stock which could fit in both a mid- or large-cap bucket. Additionally, it is worth noting that any pullback to $160 base support would provide an ideal entry point, however there is no guarantee that a pullback will occur... see chart below.
• U.S. Physical Therapy, Inc. (USPH): As the company name implies, USPH operates outpatient physical therapy clinics. USPH exhibits price and RS breakouts and is easily the most attractive setup with Group HC-32 Rehab Services. Following the breakout topside $130, the depth of the base suggests a minimum price target of $161. Add exposure to this small-cap growth stock... see chart below.
DexCom is a medical device company primarily focused on the design, development and commercialization of continuous glucose monitoring systems for use by people with diabetes and by healthcare providers. The company's products include: DecCom G6?, which allows the company's transmitter to run an algorithm to generate a glucose value and to communicate to a patient's mobile device; DexCom G4? PLATINUM, which is used to adjust therapy and to educate and motivate patients to modify their behavior after viewing the effects that specific foods, exercise, stress and medications have on their glucose levels; and DexCom Share?, which transmits glucose information to the mobile devices of designated recipients.
U.S. Physical Therapy, through its subsidiaries, operates outpatient physical therapy clinics that provide pre-and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, treatment for neurological-related injuries and rehabilitation of injured workers. The company operates through subsidiary clinic partnerships. To a lesser extent, the company operates some clinics through wholly-owned subsidiaries under profit sharing arrangements with therapists. The company has a majority interest in a company, which is a provider of industrial injury prevention. Services provided include onsite injury prevention and rehabilitation, performance optimization and ergonomic assessments.
Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.
Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.
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