Stocks are stepping up against some pretty stiff headwinds these days. A lot of stocks have been clawing their way back since the initial coronavirus-fueled sell-off, and June promises to be volatile for all investors. June can also be a winning month if you buy into the right stocks.
Livongo Health (LVGO), Align Technology (ALGN -1.24%), and DraftKings (DKNG -0.73%) are hot stocks that could keep the good times coming this month. Let's see why these three stocks are hot names to consider buying in June.
Diabetes isn't going away anytime soon. We're now at 34.2 million people with the ailment in the U.S., with an even larger group of people currently diagnosed with pre-diabetes. For the more common type 2 diabetes, the potentially catastrophic outcomes improve dramatically with a healthier diet and commitment to exercise -- and that's where Livongo Health comes in with its high-tech platform.
Livongo's platform uses glucose meters tethered wirelessly to its platform, and then its data scientists and machine learning take it from there. Livongo members receive active coaching when they start to go astray, steering them back into healthier lifestyles to improve their blood sugar levels.
The improvement for the typical diabetes member is pretty dramatic for the platform that's available on a growing number of health insurance plans and through self-insured corporations. Livongo's membership base has doubled to 328,000 members over the past year, and it's easy to see why insurance companies and members alike are gravitating to the platform.
Livongo estimates that the average member's improvement translates into $1,900 in annual medical cost savings to the insurer or self-insured company. You can scroll through the long list of diabetes implications to see what members get out of high-tech proactive coaching.
The stock has more than tripled since the mid-March sell-off, but it's hard to bet against a platform that saves money and lives as it squares off against new chronic conditions with its battle-tested system.
Align's Invisalign is the undisputed top dog in clear dental aligners. Comparable in price and results to traditional metal braces -- but without the trauma and aesthetic stigma -- it's easy to see why Align has helped straighten the teeth of 8.3 million people over the past two decades.
There are cheaper knock-offs out there, but you don't mess with the industry leader and its proprietary virtual modeling software, rapid manufacturing processes, and mass customization. It tested 260 different materials before settling on its patented SmartTrack aligner material that's gentle on teeth without slowing the treatment process.
Growth has been pretty robust at Align headed into the COVID-19 brake tap that shut down dental procedures across the country in March. Revenue growth in each of the four previous years is pretty encouraging:
- 2016: 28%
- 2017: 36%
- 2018: 34%
- 2019: 22%
It's not just the top line smiling pretty. Free cash flow soared 80% last year. With the economy starting to open up and people probably doing a fair share of teeth grinding during the lull, there should be a big rebound at Align after its unsurprisingly rough first quarter.
Align is a winner, and I'm not just saying that because its 5-D imaging system was awarded the "Best New Technology Solution For Dentistry" at last month's 2020 Medtech Breakthrough Awards. Align should keep investors and customers alike smiling this month.
It was a bit of a shock to see fantasy sports betting giant DraftKings hit the market as a reverse merger in late April, but it's easy to see why the conventional IPO route wasn't going to happen for a company during the stormy COVID-19 sell-off. It was an even bigger surprise to see the stock go on to more than double in May after a quiet debut. Its fantasy sports hub and DraftKings Sportsbook platform need live sporting events to get folks going, and social distancing finds the world hitting pause on most contact sports.
Things are starting to get better on that front. The NBA just approved plans to continue the current season at a neutral site starting next month, something that will mean no fans in the stands -- but it's not going to get in the way of fantasy and conventional wagering. The country's interrupted hockey and soccer season are also making headway to start playing again.
DraftKings will be volatile. It's fair to argue that last month's gains weren't entirely warranted. However, in sports and wagering, you don't mess with the hot hand. DraftKings has a hot hand right now.
Livongo Health, Align Technology, and DraftKings are hot growth stocks that should keep streaking in June.