Moderna (MRNA -1.03%) and Teladoc Health (TDOC -2.05%) ended 2020 as stock market stars, soaring 434% and 138%, respectively. Which one is more likely to repeat the performance in 2021? Let's use a stock-picking game to find out. It's called Motley Fool CAPS, and it uses the wisdom of crowds to find the best investments.
Players predict how stocks will perform versus the S&P 500 Index over a particular time frame. CAPS then rates players based on their performance compared to others. And CAPS rates stocks according to the number of players who are bullish on them. Importantly, the game weighs the opinions of highly rated players more heavily.
Here's what CAPS tells us about two of today's most dynamic healthcare companies.
3 out of 5 stars
What investors might be noticing: Moderna is among the top two players in the coronavirus vaccine market. The company's orders this year represent $18.4 billion in sales. It now is working on a booster shot and expects to make it available this fall. That also represents billions in sales. The company has about two dozen programs in the pipeline.
What's holding Moderna back from a better score: Investors still aren't sure if the billions in coronavirus vaccine revenue will be recurrent. If the company confirms that vaccinations will take place annually well into the future, investors likely will become more bullish on the shares.
5 out of 5 stars
What investors might be noticing: The pandemic offered Teladoc's business -- online medical visits -- a huge boost. It posted full-year revenue growth of 98% to $1 billion. And total visits increased 156% to more than 10 million. The company's outlook for this year is bright. Teladoc said it's seeing "strong momentum" and forecasts full-year 2021 revenue of as much as $2 billion.
What could hurt Teladoc's rating: As the pandemic eases, Teladoc must show that its momentum does indeed continue and that patients keep coming back. Investors will also look to see how much last year's acquisition of Livongo adds to Teladoc's growth. If these two areas disappoint, the stock could lose stars.
Foolish bottom line
Top-starred stocks don't always bring in the biggest gains. Of 450 five-star stocks in CAPS, 25% have produced triple-digit returns over the past year. And of the 437 three-star stocks, 39% have generated triple-digit returns in that time frame. So, if CAPS is our guide, it looks like Moderna is heading for another big year...