Invest in These Two Healthcare Shares Intensively in January
Investing in January might not guarantee stellar returns, but that doesn't mean you should overlook promising opportunities in the long run. Two such companies worth considering are DexCom and Exact Sciences, both excelling in the healthcare sector.
1. DexCom
DexCom, a leader in the continuous glucose monitoring (CGM) market, had a bump in the road in 2024 with slower-than-expected revenue growth due to patient rebate eligibility issues. This result led to a significant drop in DexCom's shares. Despite the rebound, the stock is still substantially down from its pre-August levels.
However, DexCom's long-term potential is substantial due to the benefits of CGM devices over traditional blood glucose meters. These advanced devices can automatically measure glucose levels up to every five minutes, helping patients make better health decisions daily. They are a significant improvement over manually operated blood glucose meters, which only capture one-time glucose levels.
DexCom's competitive edge extends beyond diabetes treatment, as they launched Stelo, an over-the-counter CGM option for people with prediabetes. Moreover, DexCom's devices are compatible with third-party insulin pens, pumps, and other equipment, creating a network effect that should propel further growth.
2. Exact Sciences
Exact Sciences brings innovative cancer diagnostic tests to the table, with their most notable product being Cologuard, an at-home, non-invasive test for colorectal cancer. Despite strong revenue growth and high market potential, Exact Sciences remains unprofitable.
The U.S. Food and Drug Administration (FDA) approved an improved version of Cologuard in 2024, which is 5% cheaper to manufacture than the previous version. This development should aid in increasing physician prescriptions and bolstering the bottom line. The company's goal is to screen the 60 million eligible, unscreened patients between 45 and 85 in the U.S.—not to mention the various other devices Exact Sciences is working on, like a potential multicancer test.
Exact Sciences' growth potential makes it an attractive option for healthcare investors.
Both of these companies have opportunities to bounce back from recent challenges and deliver impressive returns to long-term investors. Fundamentally sound stocks like DexCom and Exact Sciences represent solid choices for any portfolio, regardless of the time of year you decide to invest.
Investing in DexCom or Exact Sciences, despite their current challenges, can yield substantial returns in the long run due to their promising business models and growth potential. The financial implications of DexCom's CGM devices, such as Stelo, and Exact Sciences' advanced diagnostic tests, like Cologuard, are significant, making them attractive options for investors seeking long-term financial gains in the healthcare sector.
