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Why Livongo Health Stock Jumped Today

By Keith Speights – Updated May 12, 2020 at 3:35PM

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A plug from a well-known TV host appears to have helped boost the healthcare company.

What happened

Shares of Livongo Health (LVGO) were jumping 11.8% higher as of 3:05 p.m. EDT on Tuesday. The surge appeared to be the result of Jim Cramer highlighting the stock on CNBC's Mad Money on Monday.

So what

The boost from Cramer mentioning Livongo on his long-running TV show will likely be only a temporary one. But the underlying reasons he likes the healthcare stock are good ones for long-term investors to consider.

Smartphone displaying health metrics next to a glucomter on top of documents with health information

Image source: Getty Images.

Livongo's personal health platform helps individuals with chronic illnesses such as diabetes, hypertension, and obesity more effectively manage their conditions. Cramer noted that these chronic illnesses are "three of the biggest risk factors that can make COVID-19 fatal."

That observation is correct. Even without the coronavirus pandemic, though, diabetes, hypertension, and obesity are each major health problems that continue to affect more people every year. Livongo Health's long-term prospects look very strong, with or without the impact of the COVID-19 outbreak.

Now what

Free positive publicity is always welcome news for companies. Even better news could be on the way for Livongo.

CEO Zane Burke said in Livongo's Q1 conference call last week that the company expects the U.S. government "will take further actions to expand the use of remote monitoring, managing and testing, to better protect our most vulnerable populations with diabetes, hypertension, keeping them at home, healthy and out of harm's way." Such actions would likely create an even bigger opportunity for Livongo's personal health platform.

Keith Speights owns shares of Livongo Health Inc. The Motley Fool owns shares of and recommends Livongo Health Inc. The Motley Fool has a disclosure policy.

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