You wouldn't know it by watching business media, but healthcare investing isn't limited to marijuana and gene editing. Some of the sector's best-performing stocks this year have flown entirely under the radar, and Guardant Health (NASDAQ:GH) may be the most egregious oversight of them all.

Guardant Health has seen its share price soar 78% in 2019, but it's still a relatively small company with a leading position in what could become a $100 billion market. Here's why this under-the-radar stock could become a top performer in the years ahead.

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Blood samples vs. invasive biopsies

The FDA has approved some amazing new cancer treatments in recent years, but they aren't much use if oncologists don't know about the DNA that's driving your disease. Guardant Health's biopsy-free blood test, Guardant360, is the first and only comprehensive noninvasive test for tumor sequencing in use by oncologists today.

Innovation's important, but the key to success in the healthcare sector is making sure patients can get someone else to pay for your product. Guardant360 recently earned its first Medicare reimbursement decision, and Guardant Health will be reimbursed at $3,500 per lung cancer patient in California who uses the test. The average lung cancer biopsy costs Medicare $14,000 once you factor in frequent complications, which suggests this test could eventually save taxpayers billions each year.

A couple of years ago, genomic tumor sequencing wasn't much use for a majority of patients, and many who should still aren't learning much about their tumors. A decade from now, though, treating patients without understanding the genetic makeup of their tumors could be grounds for a negligence lawsuit.

Check out the latest earnings call transcript for Guardant Health.

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Advanced-stage cancer is only the beginning

Guardant Health thinks around 700,000 patients in the U.S. could eventually benefit from advanced-stage cancer screening, which would drive up sales to around $6 billion annually. There are around 15 million cancer survivors in the U.S. who need to be frequently monitored for a recurrence, plus another 35 million at-risk patients who should receive regular screenings.

Guardant's Lunar assays have recently been released to research networks and biopharmaceutical companies. Lunar-1 is aimed at 15 million cancer survivors who need regular checkups. The largest opportunity for this company, though, is with Lunar-2 for an estimated 35 million at-risk Americans who should receive regular cancer screenings.

Thanks to the Affordable Care Act, insurers are required to pay for recommended preventive services. In 2016, another noninvasive cancer screen, Cologuard from Exact Sciences (NASDAQ:EXAS), earned one of these recommendations and the results have been spectacular. In 2018 Exact Sciences performed 934,000 tests, and will probably reach 2 million tests in 2020.

Guardant Health will begin clinical studies with its Lunar tests later this year, and the stock will jump again if results are as impressive as those we've seen from Guardant360 recently. The best thing about this under-the-radar stock, though, is that Lunar doesn't need to go anywhere to realize a return on your investment. 

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In the numbers

Shares of Guardant Health have nearly doubled since the company made its stock market debut last year. Despite the run-up, continued success with Guardant360 alone could push Guardant's recent $5.7 billion market cap much higher. The company thinks the U.S. market for advanced-stage cancer testing could reach $6 billion and it's firmly in the lead.

During the first nine months of 2018, revenue from precision oncology testing rose 80% compared with the previous-year period. Unfortunately, it only reached $50 million, which wasn't nearly enough to meet expenses, and Guardant Health lost $60 million during the same period. 

Although Guardant Health is losing money now, there's a good chance it won't need to tap investors for any more in the future. The company finished September with $271 million in cash and securities, and Guardant360 sales have been rising much faster than expenses. In fact, Guardant360 sales could allow the company to begin reporting positive cash flows in 2020. 

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To the moon

It's a bit early to assume Lunar-1 and Lunar-2 will perform as well as Guardant360, but the company's proprietary analytics are clearly getting something right. Last year, a study published by the American Medical Association showed Guardant360 outperformed actual tissue biopsies when it came to identifying targetable mutations.

Guardant's recurrent and pre-cancer screens look for DNA that has broken free from tumor cells, which is exactly what Guardant360 does but with an eye for different biomarkers. That doesn't necessarily mean the Lunar screens will succeed, but it's a pretty good sign.

Roughly 600,000 Americans are diagnosed with cancer each year, but at least 50 million should receive regular screenings. That's enough fuel to send this stock rocketing higher.