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Motley Fool Issues Rare “All In” Buy Alert
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The stock market may be in the doldrums right now. But this isn’t time to give up on investing. In fact, it’s a great time to get into the market or add to positions. In some cases, we can pick up companies with strong growth potential for a bargain. In other cases, we can get in early on a growth story that’s just starting to pick up speed.
I’ve found two stocks that fall into those categories. One is a telemedicine leader. The other is a biotech company that’s just launched its first two products. Both of these players have what it takes to grow revenue — and maybe even double your money. That means buying them today could be a genius move.
Teladoc Health (TDOC -3.91%) shares have tumbled about 70% this year. The telemedicine company grew revenue and visits in the triple digits in the early days of the pandemic. And prior to the pandemic, Teladoc’s revenue and visits already were on the rise. Still, investors worried about the company’s lack of profitability. And two non-cash goodwill impairment charges this year didn’t help matters.
But there are signs things are turning around. Teladoc’s net loss narrowed in the most recent quarter. And adjusted earnings before interest taxes depreciation and amortization (EBITDA) of $51 million beat Teladoc’s forecasts.
Teladoc is making progress on its goal of “whole person” care — from mental health to physical health. The company recently replaced three competitors at once with its full suite of products at a big care provider to government institutions. And Teladoc says it has “a number of new significant deals” that should drive revenue over time.
Today, Teladoc trades at its lowest ever in relation to sales. And revenue continues to climb. The telemedicine market is set to grow in the double digits this decade. As a leader, Teladoc should benefit. Of course, Teladoc still has to show investors it can turn growing revenue into a profit. But if it makes progress toward that goal, the shares could soar from today’s level.
It’s been a good year for Axsome Therapeutics (AXSM 31.49%). The company launched its first two products. And the stock has climbed about 50%, defying the bear market.
But this looks like just the beginning for Axsome. It started selling sleep disorders drug Sunosi a few months ago. It acquired Sunosi from Jazz Pharmaceuticals. In its first full quarter of sales, Sunosi generated $16.8 million in revenue. And prescriptions climbed 15%.
Axsome launched its antidepressant Auvelity in recent weeks. There are plenty of rivals in this market. But Auvelity offers a big plus. It results in significant improvement after just one week. That’s compared to several weeks for most others. And over time, Auvelity may become a blockbuster. The drug’s revenue may reach $1.3 billion by 2029, according to GlobalData.
But Axsome’s growth doesn’t stop here. The company’s pipeline includes candidates that are in phase 2 development or farther along. This is positive because it means investors may not have to wait too long for additional growth drivers. Next up: Axsome plans to submit its migraine candidate to regulators in the third quarter of next year.
Wall Street expects Axsome shares to rise nearly 80% within the coming 12 months, according to the average forecast. This and even further gains seem very possible considering Axsome’s brand new drug portfolio — and its other drug candidates waiting in the wings.
Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axsome Therapeutics and Teladoc Health. The Motley Fool has a disclosure policy.
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