On August 25, 2020, I said that there was a fire sale you as a savvy tech investor could take advantage of with Teledoc Health Inc. (TDOC).
Wall Street analysts were worried about Teledoc buying Livongo Health Inc. (LVGO) and the $18.5 billion price tag. But I know this was a big move that would add to TDOC’s lead in the shift to telemedicine.
Livongo makes devices that allow healthcare providers to remotely monitor health metrics such as blood pressure, blood sugar, weight, even behavioral health. Together they allow physicians and nurses to speak to patients remotely while having the most up-to-date information on their health.
I made it clear back then that I expected Teledoc Health Inc. (TDOC) to bounce back and beat the market.
From the day shares hit a bottom on November 10 to its recent high on February 19, TDOC zoomed some 69.6%.
Over that period, it crushed the S&P 500 by a stunning 640%.
Now, history is repeating itself, and this massive profit opportunity is coming back around. The stock is grossly oversold once again, and I see a similar setup in the making as the firm disrupts the $1.3 trillion medical market.
Here’s the thing.
According to a survey from The Harris Poll, 65% of consumers surveyed plan to use telehealth services more often after the pandemic, putting paid to Wall Street’s ridiculous notion that we’re just itching to go back to the doctor’s office.
When Wall Street overreacts and goes right, you can make a fortune by avoiding the noise and going in the opposite direction.
In the latest edition of wild overreactions, Cathie Wood, the top-notch ETF manager of Ark Investment Management, received some flak from The Wall Street Journal.
I’ll have more on that in just a bit and why it is totally off the mark.
But make no mistake. Wood has an uncanny eye for finding breakout stocks with a market-beating track record to prove it.
One particular feather in Wood’s cap is an ETF that she runs focusing on the cutting-edge field of genomics, a tech that basically didn’t exist just a decade ago.
Without genomics, we wouldn’t have been able to understand the structure of the coronavirus. Not only that, but the first two vaccines approved both relied on a hot new segment of genomics.
And this is an industry that is projected to multiply from $18.85 billion in 2019 to $82.60 billion in 2027, according to Fortune Business Insights. That’s more than 300% growth in less than a decade.
I’ll give you more details in a moment. But first, I want to point out the sizzling returns that Wood has amassed.
Over roughly the past year, Wood’s fund beat the market by a stunning 471%.
If you want to make big money in e-commerce there’s an unusual data point you need to know about.
I say it’s “unusual” because most investors wouldn’t make the connection between online sales and research and the price of lumber.
But we’re not most investors. We know that by drilling below the surface to find things that elude others we can crush the market with great tech leaders.
Lumber futures recently soared 49% in roughly three weeks. Closing at $992.40 per thousand feet, the price of lumber set a new record.
The reason: we’re in the midst of a major building and remodeling boom in the nation’s $1.9 trillion market for home sales brought on by the coronavirus lockdowns.
Simply stated, millions of homeowners are looking to relocate now that they can work from home.
Today, I want to show you a very savvy e-commerce company that is a pure play on home sales.
Right now, the market can be a scary place, as choppy as it is. Just look at what happened earlier this week. Since February 24, the broader market is down by more than 2.5%.
The thing is, I’m here to tell you that these movements might seem troubling, the overall trend still holds true, the road to wealth is still paved with tech.
If you zoom out and have a look at the past year overall, the broader market is up by almost 30%.
And that’s in spite of the hit that the market took last march when the beginnings of the coronavirus pandemic caused sharp selloffs.
Because regardless of the turns the market might take because of any one day’s headlines, the point remains, that the innovation of the high-tech sector making new things possible is what adds wealth to the economy.
The tech sector will continue to be the economy’s wealth engine even if the market is choppy for a while,
Last month’s virtual Consumer Electronics Show (CES) featured all sorts of cutting-edge gadgets, but this year’s award for consumer high-tech innovation ended up going to a company that makes tractors.
It’s no joke. Looking at what they’ve brought to the table, it couldn’t be clearer that they deserve it. What they’ve created perfectly symbolizes the marriage of hardware, robotics, and software in the digital age.
More than that, it’s proof that the modern high-tech sector can transform and revolutionize any aspect of today’s economy, even something like agriculture, that’s almost literally “as old as dirt.”
After all, a field known as “precision agriculture” is making modern farming a very sophisticated and tech-driven enterprise.
This is a company pushing the boundaries of a sector worth $6 billion and growing at 15% a year.
Even better, it’s beating the broad market by more than 140%.
Of all the changes the ongoing coronavirus pandemic forced on us, the change in healthcare has got to be one of the most profound.
Whether we’re managing a chronic condition, like high blood pressure, say, or an acute illness like strep throat, the market demand for healthcare needs hasn’t decreased a bit, but COVID-19 has made getting in to see a primary or specialist physician a lot more complicated and, in some cases, a lot riskier.
That means telemedicine, and the broader field of digital healthcare, are the name of the game right now. The $20 billion Teledoc-Livongo merger is proof of that.
If you want to understand how tech saved the American economy in 2020, and will lead it forward in 2021 just remember that pretty much the entire economy runs on semiconductor chips. Back in April, chip firms were catching bad press, but next year, they’re expecting 8% growth. And at the same time, I’m expecting great things from standout leaders in the most promising sectors for the new year, like Keysight Technologies Inc. (KEYS) for 5G, Etsy Inc. (ETSY) for Ecommerce, and Square Inc. (SQ) for Fintech. I’ve been a fan of Apple Inc. (AAPL) for a long time, and I still think that they make a great safety play.
The concept of “the cross-price elasticity of demand,” may sound like something just for econ nerds, but I assure you that it’s very profitable for you as well.
And my own experience earning an honors economics degree and serving as a college teaching assistant in the subject can make it pretty painless too.
Simply stated, cross-price elasticity of demand means that, if whiskey is expensive relative to beer, more people will buy the latter.
But what if there was a hidden way to get the equivalent of whiskey at beer prices? I don’t know about you but I’m on board with that.
Just take a look at Amazon.com Inc. (AMZN). The King of Ecommerce trades at about $3,130 a share.
But there is another leader in the same space whose stock costs less than one-third of AMZN even though its earnings are growing 10% faster.
I’m not sure I could have survived this year without shopping online, and I have a feeling many of you are thinking the same thing. In fact, e-commerce is growing faster than ever before, jumping to 16.1% of total retail sales in Q2 2020 from 10.8% last year in the United States.
That equates to billions of dollars spent online from groceries to electronics and even cars. That’s why we have seen stocks like Shopify Inc. (NYSE: SHOP), Amazon.com Inc. (NASDAQ: AMZN), and Carvana Co. (NYSE: CVNA) skyrocket over 100% this year with everyone at home.
The best part about this is that it is not a trend that is going away anytime soon. According to a survey done by the United Nations Conference on Trade and Development, the Covid-19 pandemic has forever changed online shopping behaviors. Following the pandemic, more than half of the survey’s respondents will continue to shop online more frequently.
The pandemic has accelerated the shift towards a more digital world, and we have seen that everywhere. We talked about it with MercadoLibre Inc. (NASDAQ: MELI) in Latin America and with Sea Ltd. (NYSE: SE) in Southeast Asia.
Now I want to talk to you about an entirely different market with a recent IPO that is taking e-commerce head-on in Russia.
We have all heard of Amazon and Alibaba, but chances are you have not yet heard about Ozon Holdings PLC (NASDAQ: OZON), one of the top e-commerce companies in Russia, with a bright future ahead of it. Interestingly enough, just like Amazon, it was founded as an online bookstore in 1998.
They quickly expanded to sell clothing, music, movies, electronics, fresh food, and now offer more than 9 million products across 24 product categories.
Now you may be thinking, isn’t there a lot of risk to investing in a foreign country? Well, yes there is always some risk in investing in foreign companies. The same could be said for investing in China, where companies like Alibaba Group Holding Ltd. (NYSE: BABA), JD.com Inc. (NASDAQ: JD), and Nio Ltd. (NYSE: NIO) have all brought triple-digit returns.
At the time I told you about a medical device leader that had just received approval for a Covid-19 test, and shot up 120% in two months.
But this is not just a COVID testing play. From early 2019 through this past February’s correction, this stock was outperforming the S&P 500 by an astonishing 278.5%.
This firm is a leader in the medical device market as part of a trend toward remote patient monitoring that’s been supercharged by the COVID pandemic.
With the coronavirus surging once again, the investment thesis is only getting better.
