Is it time?
It seems like just yesterday that Dexcom, Insulet and Tandem were three of the hottest stocks on the NASDAQ. Yet over the last three months all three have been hit hard, with the NASDAQ down over 21% over that span these three stocks have fallen more than that with Insulet getting hit hardest falling almost 29%. Now we could mention that trading at $108 per share Dexcom is still well into the money since we noted it was a good time to buy when the stock was trading near $60.
So, do we chalk up this recent slide as normal pullback with the market or is there something else going on here that would provide a moment of pause? In our humble opinion, ok nothing we do is humble we get that, nothing much has changed for any of these companies and in some situations market conditions have actually improved. Given that all three are in MedTech and we’re in the fourth and biggest quarter for sales it might be time to throw a few dollars at these companies before they report 4th quarter results which we believe could exceed expectations.
Let’s look at the two pump companies first and start with Tandem which is currently trading around $32 and is up an astonishing 1,157% (and no that is not a misprint) on a year to date basis even with the recent selloff. With the Basal IQ system now available and the Control IQ on its way the future looks bright for our neighbors.
Insulet is also in positive territory for the year and they too have the DASH coming. Although we suspect it will be some time before their recently announced partnership with Tidepool will pay off the day when an OmniPod can control their system from their smartphone is coming.
What Tandem and Insulet also have going for them and this cannot be underestimated is the continued issues at the Evil Empire. As we noted with their latest money grab Medtronic is getting just a little nervous as the Animas conversions aren’t going as planned. With Tandem now on solid financial footing and with the Control IQ around the corner patients now feel comfortable with the company. Patients are also aware the DASH is coming, and it doesn’t hurt any that both the Tandem and Insulet systems work with the Dexcom system.
As we keep stating Medtronic no longer has the coolest toy in the toy chest. And it won’t be long before their much ballyhooed 670G will be considered inferior to what Tandem and Insulet are offering. Should the ongoing FDA investigation result in a warning letter, recall or worse both Tandem and Insulet stand to benefit.
Things at Dexcom also continue to look good. As anticipated the G6 is going gangbusters with strong patient demand. The company is not devoid of competition from the FreeStyle Libre but as we suspected the CGM market is not just expanding but showing signs of maturing. Just as the BGM market morphed into a bunch of submarkets the CGM market is following a similar path.
Ironically both Abbott and Dexcom are also benefiting from the problems at Medtronic. Given all the fires that are raging in Northridge the company cannot afford to take their eye off the ball. The goose that lays those golden eggs is being threatened and when it comes to Medtronic job one is to protect that goose at all costs. Therefore, the company has been unable to ramp up any major efforts to get their stand-alone CGM into the hands of patients.
So, boys and girls on this night before Christmas when not a creator is stirring not even a mouse it may be wise to put some Dexcom, Insulet and Tandem in your Christmas stocking. Merry Christmas everyone.