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DexCom Starts the Year Strong

Posted on June 8th, 2020

DexCom Inc. (DXCM) had a reasonably strong start in 2020, outperforming the S&P 500 over the past five months, rising by approximately 66.6% in comparison to the S&P 500’s loss of about 1.14%. The strong start and investor demand have gotten the shares added to the WhaleWisdom WhaleIndex.

DexCom is a medical device company focused on the development, manufacturing, and distribution of glucose monitoring systems for diabetes management. The company has received positive attention from diabetes patients due to DexCom’s G6 continuous glucose monitoring (CGM) system.

Making the Index

Given DexCom’s impressive performance, it is not surprising that the stock was added to the WhaleWisdom WhaleIndex 100. DexCom has a presence in the healthcare sector, and its latest CGM has appeal for being able to pare to smart devices to send customers alerts and minimize the need for fingersticks. With a healthcare product of this nature, it’s understandable that even the uncertainty of our current stock market has had little impact on DexCom’s value.

 

(WhaleWisdom)

Institutions Sell, While Hedge Funds Acquire

Institutions overall were selling the stock, but volume was minimal. The number of aggregate 13F shares decreased by approximately 0.9% as of Q1 2020, to roughly 89.4 million from about 90.2 million just three months earlier. For comparison, hedge funds increased their total 13F shares by about 1.7%, up to 35.5 million from 34.9 million.

 

(WhaleWisdom)

Analysts Share Favorable Forecasts

Citigroup Global Markets, Inc.’s, increased DexCom’s price target to $440 from $361 and maintains a Buy rating on shares, recognizing that the demand for new technology in diabetes management is high. Piper Sandler raised their price target to $450 from $375, while keeping an Overweight rating on the shares.

DexCom has seen its earnings rise in recent years, and now analysts are forecasting a significant increase in year-over-year growth for 2020, rising 51.9% to $2.17 per share. Meanwhile, revenue is forecast to grow by over 22% in 2020 to $1.79 billion.

 

Promise Lies Ahead

While DexCom isn’t cheap, trading for 121 times 2021 earnings estimates, there continues to be strong demand for the shares. DexCom’s climb onto the WhaleWhisdom Index supports this demand and gives hope for a sustained move higher. However, it should be noted that the restrictions on non-essential healthcare services during the Coronavirus pandemic have had a slightly negative impact on the volume of new customers for DexCom, but this is viewed as temporary. DexCom appears to have positioned itself to continue forward momentum through and beyond the pandemic. Current investors will likely maintain their stakes in DexCom, with new investors to come.

This entry was posted on Monday, June 8th, 2020 at 9:00 am and is filed under 13F, WhaleIndex. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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