Stocks are inclined to perform well in January, but that is not an excellent reason to speculate this month. Strong returns aren’t made in a single 30-day period. As a substitute, as long-term investors know, the bottom line is to carry onto excellent firms that may perform well over the long term. There are a lot of candidates to that effect in the marketplace. Let’s consider two within the healthcare sector: DexCom (NASDAQ: DXCM) and Exact Sciences (NASDAQ: EXAS). Let’s discuss why these two firms are value investing in at once.
DexCom is a pacesetter in the continual glucose monitoring (CGM) market, or devices that help diabetes patients track their blood glucose levels. The corporate encountered some issues in 2024, including slower-than-expected revenue growth as a result of patient rebate eligibility issues. DexCom’s shares fell off a cliff after it released its second-quarter earnings report. Though they’ve rebounded somewhat, they’re still substantially down from their pre-August levels.
Considering DexCom’s long-term prospects, it’s an excellent opportunity to speculate within the stock. The adoption of CGM devices has provided a tailwind for the corporate up to now, resulting in strong revenue and earnings growth. These gadgets have significant benefits over blood glucose meters. As an illustration, CGMs can mechanically measure patients’ sugar levels as much as every five minutes, allowing them to make higher health decisions each day.
BGMs are operated by hand and only capture patients’ glucose levels at one time limit. No wonder, then, that CGMs are related to higher health outcomes. Further, DexCom still has loads of whitespace within the industry. Even within the U.S., where CGM enjoys greater penetration than in most other countries, the variety of patients who use CGMs continues to lag the overall population that is roofed by insurance. DexCom estimates a complete addressable market of 25 million people within the U.S., a mere fraction of the worldwide diabetes population.
It is also value mentioning that DexCom has expanded beyond treating those with diabetes. It launched Stelo in 2024, which is an over-the-counter CGM option that might be utilized by individuals with prediabetes. Lastly, DexCom’s devices are compatible with third-party insulin pens, pumps, etc. That grants the corporate a network effect. That, combined with the vast runway for growth ahead, should allow DexCom to bounce back from its recent dip and deliver excellent returns to investors who stay the course.
That is why the stock is a buy this month.
Exact Sciences develops progressive cancer diagnostic tests. The corporate’s hottest brand by far is Cologuard, an at-home, non-invasive test for colorectal cancer, the second leading reason for cancer death on the earth. Colorectal is very treatable when caught early, though, which is an indication that not enough eligible patients are getting tested. Health experts recommend regular screenings for people aged 45 and over. That is Exact Sciences’ goal market.