Poppy's Picks & Updates
Poppy previously recommended Teledoc Health (TDOC). Let's take a closer look at it. There are two categories to analyze a stock - fundamental analysis and technical analysis. The fundamentals are just the raw numbers - market cap, sales, earnings per share (EPS), etc. Technical analysis is reading the stock's chart and using economic factors and trends to predict a pattern and judge momentum. It's a little more subjective. The chart below can be found on TDOC's Yahoo Finance page: Teledoc Health (TDOC)
TDOC Stock Analysis
Growth - Are the company's sales (aka revenue) and profit (aka earnings per share, "EPS") growing? Stock market investors love to buy growth - that is where you will see the most stock price appreciation. The company has tremendous revenue growth, although earnings have not shown the same upward trend. Hmmm. Appears that the company management thinks revenue growth is more important than profits right now, which is a common strategy.
Profitability - Is the company profitable? You can tell this by looking at earnings per share (EPS). If EPS is "N/A" or a negative number, then the company isn't profitable. On Yahoo Finance, the EPS for Teledoc is "EPS (TTM): -1.29." In simple English, that means, "Earnings per share, over the last trailing twelve months (TTM), the company lost $1.29 per share of stock. Trailing twelve months means that whenever you look at this EPS field, it will calculate based on the stock price and earnings for the last 12 months. A lack of profitability may not be so bad if the company's revenue is growing like crazy, like Teledoc's is. Sidenote: Companies don't need to be profitable if they can easily find new funding from other sources. [I'm looking at you, Uber.]
Stock Trend - Does the stock's price (and thus the chart) show an upward trend? The past year of Teledoc looks fantastic, but the 4 years before that (not shown here), were still positive, but less so. The pandemic is likely helping to accelerate the stock's revenue and, thus, stock price.
TDOC Analysis from OthersWall St Analysts
Remember that stock analysis is not all on you. The expert analysts, who are generally wall street people at major investment banks, routinely grade stocks with a standard "recommendation rating" from one to five. More prominent companies like Apple get more updates and coverage from more analysts, while smaller companies do not. The analyst recommendations for TDOC, taken directly from Yahoo Finance, rate the company at a 2 out of 5. A rating of 2 is pretty good!
Stock Gumshoe Private Publication
Poppy and I both subscribe to a stock market newsletter called Stock Gumshoe. Here's what it had to say about Teledoc a few weeks ago:
TDOC is expensive at 25X sales, and unprofitable, so in order to buy it with any confidence here you have to have some certainty that telemedicine is entering the mainstream, ready to be a tool that a lot of folks use for primary care visits and routine healthcare consultations, letting the company finally move beyond niche applications (like providing specialists to rural areas, or coverage for traveling businesspeople). If that turns out to be true, then Teladoc is certainly not as expensive as the crazier story stocks like Zoom, and it does have a huge addressable market. I’m willing to keep holding while we see how it plays out, there is still plenty of competition from both established video conferencing tools and other (mostly private) telehealth companies, and it’s always possible that the huge health insurance companies or hospital groups will favor one software over another, which means Teladoc isn’t guaranteed to win… but I’d argue they’re the winner so far, and often those early winners are hard to supplant.
So would YOU buy TDOC? Why or why not?
- Annika bought Comcast (CMCSA) in June and Apple (AAPL) in September.
- Brenna, Lindsay, Chloe, Milena, and Bryan are still sitting on their $1000 in cash. What do you think about Teledoc Health (TDOC) ?
Please remember to update the google sheet detail tab when you buy/sell something. I look at the revision history each month so I can include your trade in this newsletter. The summary tab is at the bottom of this email as a picture and the live link to it is here.