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Mad Hedge Fund Trader

The Big Corona Play with Teladoc Health

Biotech Letter

The coronavirus disease (COVID-19) outbreak continues to inspire terror across the globe.

To date, there are roughly 398,107 confirmed cases and over 17,454 documented deaths, pushing communities to take proactive measures to stem the tide of this global pandemic.

In its wake, an increasing number of government officials and health professionals like the US Centers for Disease Control (CDC) have advised patients to take advantage of telemedicine and virtual health systems as much as possible. This is particularly helpful for those with respiratory symptoms since using these platforms could minimize contact with others along with the spread of the virus.

One of the no-brainer beneficiaries of this advice is virtual healthcare services provider Teladoc Health (TDOC).

Basically, companies like Teladoc offer personalized care without the need for patients to leave their houses. Although the kinks have yet to be worked out, the telemedicine sector should be expected to skyrocket in the weeks and even months ahead.

In fact, Teladoc shares gained 9% since February 19 — a good sign for the company especially since the broader market went down by roughly 20% over the same period.

Earlier this month, Teladoc disclosed that the number of patient visits registered in its system showed a 50% increase week over week.

Ever since COVID-19 hit the country, the company has been fielding at least 15,000 visits on a daily basis, reaching over 100,000 weekly. Teladoc shared that it has been experiencing “visit demand consistent with peak flu volumes.”

The convenience that companies like Teladoc provide can ease the burden on the broader healthcare system, which has been overworked with COVID-19 cases.

Another factor that could have contributed to Teladoc’s increasing patient load is the decision of some major health insurers to waive the patient costs for telemedicine visits.

So far, Humana (HUM), Aetna (AET), and Cigna (CI) confirmed that this policy will be relaxed throughout the national health emergency.

Needless to say, this announcement was highly appreciated by their clients, with Teladoc reporting that over half its patient visits in the past weeks are from first-time users.

However, this isn’t exactly Teladoc’s first big break.

Even prior to the pandemic and the recommendations from health experts, Teladoc has been quite impressive on its own.

Throughout the years, Teladoc has been consistent in reporting strong growth metrics. Since it went public in 2015, the stock has skyrocketed to 330% compared to the 30% gain for the S&P 500.

 Reviewing its fourth-quarter earnings report for 2019, it’s clear that this is a stock for long-term investors. Based on the management’s commentary and how the story is playing out in the past months, there’s a good possibility that investors will be richly rewarded as well.

In 2019 alone, Teladoc added a total of 14 million new members to record an impressive growth rate of 61%. The company closed the year with 36.7 million patients registered in its system.

In terms of revenue, Teladoc delivered $156.5 million, showing off a 27% jump year over year.

This is particularly impressive as it eclipsed the high end of its guidance, which fell somewhere between $149 million and $153 million. It also beat the consensus estimates of analysts at $152.95 million.

This increase in revenue was bolstered by strong growths both in the US and the international markets. Its subscription-access fees reached $127 million, which was a 24% increase year over year.

Fees collected from visits showed quicker growth to contribute $29.5 million, demonstrating a 47% jump compared to the same period in 2018.

Total office visits increased by 44%, climbing to 1.24 million and surpassing the company’s guidance range of 1 million and 1.2 million as more and more patients opt for the subscription-based plans.

Meanwhile, its paid memberships in the US climbed 61% year over year to reach 36.7 million while its fee-only access soared by 104% to jump to 19.3 million members.

While 2019 was definitely a good year for the company, it’s difficult to downplay the reality that its impressive adoption curve recently could make 2020 an even better year for Teladoc.

Looking at how the company has been thriving, two things could happen for Teladoc.

One possibility is for it to develop into one of the most disruptive companies in the industry. The second possibility is that it will get acquired by a bigger player.

No matter what happens, the outcome will be a win-win for its investors.

 

March 24, 2020/by Mad Hedge Fund Trader
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-03-24 13:00:092020-03-24 12:53:37The Big Corona Play with Teladoc Health
MHFTR

June 21, 2018

Diary, Newsletter

Global Market Comments
June 21, 2018
Fiat Lux

SPECIAL BIOTECH ISSUE

Featured Trade:
(HERE COMES THE NEXT REVOLUTION),
(CVS), (AET), (BRK.A), (AMZN), (JPM), (CI),

(BIIB), (CELG), (REGN)

June 21, 2018/by MHFTR
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 MHFTR https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png MHFTR2018-06-21 01:07:422018-06-21 01:07:42June 21, 2018
Mad Hedge Fund Trader

Cashing In On Obamacare

Newsletter

Not a day, an hour, or a minute goes by without the media blasting at me about how terrible Obamacare is. I wondered, how terrible can it be? There?s got to be a trade in there somewhere.

After intensively researching several industries I concluded that the investment opportunities created by the president?s signature legislative accomplishment are absolutely massive. The health care industry is about to get 30 million new customers with government guaranteed payments. Ten?s of millions more are being driven into the arms of the private health insurers as well. It?s almost the same gravy train that the defense industry has been living off of for the past 75 years.

The stock market has been screaming as much at us all year. Take a look at the Health Care Select Sector SPDR ETF (XLV), which has been rocketing for the past three years. Its ascent accelerated on October 1, when Obamacare officially kicked in.

You will also find the same windfall is showering upon the health insurance industry. The shares of the second largest company in the country, WellPoint (WLP) have soared by 68% this year, while the fourth biggest (AET) is up an impressive 40%.

The speeches claiming that Obamacare is a failure were written in September, before the program ever started. Not, September, 2013, but September, 1936, when Republicans fought tooth and nail against Social Security. The speeches are almost identical, word for word. I?m not kidding!

In fact, insurance exchanges are one of the oldest forms of commerce, dating back to London in the 1600?s. Lloyds of London has been around since 1871, and makes a profit in most years.

It will take Obamacare a decade to become fully operational and actuarially sound. After that it should cost the government almost nothing, just a few hundred million dollars a year for administration of the exchanges. Americans are the smartest people in the world, so there is no reason for this not to work, except political ones. In fact, ours should be better than those in Europe and Asia.

The political obstacles will fade as well. Hillary Clinton is the overwhelming front-runner for the 2016 presidential election. If elected, the earliest Republicans could repeal Obamacare would be 2025. There will probably be a liberal majority on the Supreme Court by then as well. With a 12-year track record, it is unlikely that any political party will try to repeal government-sponsored health insurance at that stage.

The stock market is also telling you that Obamacare is here to stay. Believe in the wisdom of crowds. They are usually right.

This is why the shares of entire health care and insurance industries are melting up now. This is why I want to buy into the industry now.

The easiest way to participate is through Health Care Select Sector SPDR (XLV), a basket of companies in the health care industry with a 1.71% dividend yield. Please note that a basket of stocks is going to deliver half the volatility of single stocks.

Therefore, we have to be more aggressive with the positioning to make any money, picking strikes that are closer to the money. Johnson and Johnson (JJ) is the largest holding in this fund, with a 12.8% weighting, while Gilead Sciences (GILD) is the fourth, with a 5.1% share. For a list of the largest components of this ETF, please click here https://www.spdrs.com/product/fund.seam?ticker=XLV .

As soon as the current correction ends, I?ll shoot out a Trade Alert to you as fast as the speed of light.

Fund Industry AllocationHealth Care Select Sector SPDR ETF (XLV)

 

XLV 11-20-13

WLP 11-20-13

AET

Doctor-GirlI Think I Hear a Trading Opportunity

November 21, 2013/by Mad Hedge Fund Trader
https://www.madhedgefundtrader.com/wp-content/uploads/2013/11/Doctor-Girl.jpg 301 452 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-11-21 11:49:382013-11-21 11:49:38Cashing In On Obamacare

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