In this episode of Industry Focus: Wildcard, host Emily Flippen is joined by Motley Fool contributor Brian Feroldi as he walks you through three small-cap healthcare companies that may have flown under your radar with the aim of answering the question every investor wants to know: Can this business result in 10x returns?
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This video was recorded on July 7, 2021.
Emily Flippen: Welcome to Industry Focus. Today is Wednesday, July 7th, and I am your host, Emily Flippen. Today I'm joined by The Motley Fool's tippity top tech titan of 10X treasure troves, Brian Feroldi, to chat about three small-cap healthcare companies that could have 10X potential. Brian, I like that title. I think it's my new favorite.
Brian Feroldi: Your new favorite? We will have to bring it back. You nailed it, good job.
Flippen: I like the T's. They're way easier to pronounce than the S's and the B's and all the other letters. Ts are great.
Feroldi: You shouldn't have just said that because now I am going to focus on the S's and the B's every time I'm with you next.
Flippen: When I was growing up, I actually had to get lessons, if memory serves then, in articulation because I had such a hard time. I just slurred all my words together. So the Ts are easy. Tippity top tech titan.
Feroldi: Great. Well, now you are going to make me feel bad if I ever make you trip up. I guess I'm looking up the Ts anew. Well-played, Emily.
Flippen: Well, I'm really excited for today's episode. Like I said before we started taping, I did not come up with any of these companies myself, but when you reached out to me to talk about some of them, they did. The names are familiar. I've looked at some of these before and it was fun to get to know them a little bit better and even more fun because I think the largest market cap that we have today of the businesses we're talking about is around $5 billion. I'm willing to take a bet that a lot of our listeners haven't heard of these companies either, which is, in my opinion, always fun.
Feroldi: I absolutely love looking for companies that are just like the three that we're going to talk about. They are in healthcare, they're doing something that is differentiated or even brand new in the marketplace, and their market caps, as you said, are $5 billion or less. To me, that is an ideal combination for potentially finding a company that can deliver 10X returns. Because again, they do something that's really unique, and if they can continue to be unique and grow, the market caps today are small enough that I could see those returns being realized.
Flippen: Let's talk about that for a minute. I know it's a little bit of a derailment, but I see the misunderstanding so often and new investors especially, about 10X. When you talk about 10X potential, that's the size of the business itself, not necessarily the stock price. When you think about these businesses for everybody listening, if you type in the tickers into Google and you're looking at the price of the company, and you're thinking, oh this can't have 10X returns because the share price is too high. That's the wrong way to think about these opportunities. The reason I brought up market cap was because market cap is typically the upper limit for the size of businesses. It's how big is the business itself in terms of its market share versus how big is the market and some businesses, [...] Amazon, Apple, have huge markets, other ones much smaller. When you go through these businesses today, I think I will put a lot of emphasis and context on the market opportunity, what a lot of businesses call the TAM, the Total Addressable Market in context to how large the business already is. Because in order to 10X of your $5 billion company, that involves becoming a $50 billion company at a minimum, which is a lofty goal.
Feroldi: That's a really important point that we need to say again. It is very common, especially for new investors to comment and say, "The share price of this company is $200 or whatever. It can't 10X. That would make it a $2,000 stock." That is the wrong metric to focus on. If you're looking for companies that can 10X, really train yourself to look at the market cap and ask yourself, if you put a zero on the end of this market cap, does that make logical sense? To your point, when Apple was a $200 billion company, it still went onto 10X. That just blows my mind, that you can be that big and then eventually 10X. But to your point, this is something that I always do. I always focus on what's the market cap of the company, can it 10X from there, and does that make sense?
Flippen: For anybody who is listening, you've loved discussions on market caps, may I just do a quick shout-out for David Gardner's Rule Breaker Investing podcast where he talks about this a lot, quizzes analysts like myself about the market caps of companies, and I inevitably lose every time, but it is always fun to think about. But derailment aside, let's get into it. Everyone's here for healthcare companies. Brian, what's the first one you got for us?
Feroldi: The first company is called Progyny (NASDAQ:PGNY). The ticker symbol there is PGNY. This is the largest, and I would probably argue least risky of the three companies that we're going to talk about. For those that have never heard of this company before, the mission statement says a lot. Our mission is to make any member's dream of parenthood come true. They are focused on the infertility market. Couples that are having trouble conceiving. Progyny is a fertility management platform that offers one-on-one coaching with their members to really maximize the chance that they have a successful pregnancy. Progyny sells its services to employers to offer this benefit to their members, and the numbers really speak for themselves. The company has the clinical data that shows that when a Progyny member has a much higher chance of becoming pregnant, a much lower chance of having a miscarriage, and a much lower chance of having twins or triplets, which is a common thing that can happen. By partnering with Progyny, you really maximize the member's chance of having a successful pregnancy.
Flippen: To be clear, the unique aspect of this business is that they're going to the employers themselves and saying, "Hey, you should offer this as a benefit." This is a really under-served market. Most insurance plans don't offer this level of coverage and nothing this comprehensive. When you think about big companies that are competing really hard for specialized talent today, clients include Microsoft, Apple, PayPal, just to name a few, these are businesses that are doing their best to retain their employees and offering Progyny as a benefit as part of a comprehensive healthcare package can help retain people. When you bring talent on, when they're going through the process of expanding their family, if they're struggling with issues like infertility, it just makes them want to stay with their employment more, so theoretically, decreasing the cost of the employer from an employee churn.
Feroldi: When you look at the market that Progyny is going into, it's not like these things weren't covered by anywhere else, but Progyny is just hyper-focused on infertility and in a lot of other cases, if you have fertility benefits, it's really up to you to do everything. You have to research what your benefits are, you have to find out what providers near the area offer them, you have to do the research on the drugs. There's no one that's really coordinating that process for you, and the coordination is a huge deal. Progyny really offers personalized service that eliminates a lot of the barriers for people. Because of that, their members really seem to love them.
Flippen: A survey that Progyny actually throws out, I believe it was their most recent 10-K, could be their S-1, either way, they brought a survey from the Reproductive Medicine Associates of New Jersey, which found 90% of people who needed fertility treatment would actually leave their employer if it meant better coverage. I know you want to talk a little bit about the opportunity because a lot of people may be thinking to themselves, well this doesn't affect a lot of people. When we talk about 90% of people who struggle with infertility leaving, how big of a market is that really? Well, they also go to the state that one in eight people have some issues with fertility, way bigger than people may be giving it credit for.
Feroldi: Yeah, it's a really big market. Infertility, it affects a lot of couples to your point. The company currently pegs its current market opportunity, it's TAM, at about $7 billion. They see that number growing significantly over the next five years to about $15 billion. There's a number of reasons why that's in place. But if you're thinking of a niche market opportunity, I encourage you to think again.
Flippen: All of this is great, but for investors, and we have a medley of opinions. What stands out to you as concerning here? Because at face value, I think this is a good company, doing a good thing, and expanding market opportunity. Where do you have holdups? If any.
Feroldi: Well, let's talk about the good first. Progyny has been a great performing stock since it's come public. I think at this point of the game, they've actually built themselves a pretty decent moat. They have the largest network of fertility specialists in the country and they cover 50 largest fertility practices in the country, for example, on their network. They have a trained group of staff that is expert at helping their members. They have the clinical data behind them to show this. One thing that impressed me about this business is while they started with the one on one coaching aspect of it, a few years ago they launched a brand new business line called Progyny RX, which incorporates the pharmacy benefit into them. They went out to all of their own clients and offered this as a service. That's really taking off. I really liked that the company has basically developed a whole new business line from scratch that the market is clearly appreciating. That shows me that this company has some optionality to it. Another thing is, the management team here is really invested in this company.
The current CEO, David Schlanger, he's the former CEO of WebMD. That's a pretty successful company. If you look at these companies' growth rates, they've been extremely impressive. In fact, if you were to just ask me at the beginning of 2020, "Hey, what's Progyny going to do in a COVID world?" I would've said, "Oh, this seems like a nice benefit." It needs to have benefits. I'm sure their growth is going to hit a wall. They actually accelerated their revenue growth in 2020, so that blew me away and just showed me that this product isn't nice to have, it is becoming a need to have. Another thing that is really interesting, and I think it makes this the lowest risk. This company is profitable. It's already profitable, even though it's growing its top line at a basically 50% rate. When you add all that together, there's a lot to like about this business.
Flippen: I'll add, now that you mentioned it. I just love the optionality they have in their platform. Progyny RX, I think, is a really good example of that. It's the fastest growing part of their business, I think it grew 54% in the most recent quarter, and it represents a quarter of the company's total revenue, and that was originally this ancillary line for them. I also love that. Anytime a business is profitable and free cash flow positive, that to me says, "Hey, we can continue to reinvest in our business. In the case of Progyny, it's probably just reinvesting into acquiring more employers into their platform, building out that salesforce to be even larger to make good on that TAM. I think if you look at just the numbers, in the United States, there's at least 8,000 employers with 1,000 or more employees, which means Progyny only covers around 4% of the 69 million employees of these companies. Theoretically, there's a lot of room for them to continue to grow just within the niche they operate today.
Feroldi: That's the theory. This also isn't just a U.S. problem, they haven't yet gone international. But can this concept transfer overseas? That's not a given. But if they could make it work, that could dramatically increase their market size. But even just within the U.S, I think there's plenty of room to grow. But you did ask what is the knock against this company. There is their potential that they've already captured the low hanging fruit of the market, and that all their early growth has come from the likes of Microsoft, Apple, PayPal. Really big companies with huge budgets that really want to offer this service to attract and retain the best employees. Will that trickle down as you go into smaller companies? That remains to be seen at this point.
Another thing that I didn't like about this company when I researched it was that the gross margin here is pretty low. The gross margin is about 21%. That does not give this company a lot of room when it makes a new sale to reinvest back into the core misses. I think that's just the nature of the design of the business and also hasn't prevented them from becoming profitable, but I personally like to invest in companies with high gross margins. Then finally, is there a chance that traditional insurers could wake up and offer a service that's similar to this? I don't know how realistic that is given how specialized this market has become. It's not like if you partner with Progyny that you don't go with a different insurer, this is like an add-on to it. But it is possible that competition could arise eventually. But all in all, I think there's a lot to like about this business.
Flippen: I also think there's a lot to like. I think if I was looking at the three and I was intrigued, interested in buying the lowest risk one, as you mentioned at the beginning, I think Progyny out of the three we're going to talk about, is probably the least risky because of how scaled the platform already has become. That being said, clearly, not a riskless company. We're talking about a company that's disrupting an aspect of health insurance here, which is challenging within itself. My biggest concern is exactly like you mentioned, they only have around, I think 180 employers on board right now. It's going to be hard for them to convince the players to pay more money to offer this service if employers feel like they don't need to in order to retain the top talent, which won't be every company. It won't be that entire addressable market, those 8,000 employers. That being said, strong business, I definitely like it. Actually out of the three that we researched and talked about today, Brian, this is the one that may meet the most upset on a personal level. Really just a sad industry to dig into, but also really made me aware of what important work this company is doing, and that's Pulmonx.
Feroldi: Pulmonx or I don't know if it's Pulmonx, I've never heard it pronounced, just pronounce. We'll go with Pulmonx and Pulmonx, one of those two is probably right. The ticker symbol here is lung, L-U-N-G. Great job of the marketing team on getting that ticker symbol. This is a $1.6 billion medical device company that is fairly new to the public markets. This is a medical device maker that's focused on emphysema. Emphysema is a really severe form of chronic obstructive pulmonary disease, aka COPD. COPD is a chronic disease that affects millions upon millions of people around the world. COPD is a progressive disease and 25% of them end up developing emphysema. Emphysema just sounds horrible, you have all kinds of problems breathing, and it's really hard to do anything in life if you can't breathe properly.
Flippen: Yeah, I mentioned at the offset that this was the one that upset me the most. I think it was just learning about how debilitating emphysema can be. In fact, Pulmonx or Pulmonx cites a lot of studies that say it could be even worse than the people who are suffering through lung cancer. The issue is a lot of people don't go to the doctor, don't realize this is an issue until they can't do stuff like walk up the stairs to get to their bed on the second floor, and they're being forced to change their lifestyle. They can't leave their apartments, they can't get to their bedrooms, can't get to the bathroom. Really, really debilitating stuff. This business, Pulmonx, I'm very uncomfortable with my pronunciation now Brian. Pulmonx, Pulmonx, whatever it is, this business really is focused on improving quality of life for these progressive patients. They are narrowly focused on those most of their cases, so these are for people for whom medical management of their emphysema has not relieved their symptoms and they don't want or are ineligible for these really invasive surgeries which are the only alternative.
Feroldi: Yeah. The traditional way that you treat emphysema is through an inhaler, and there's lots of drugs out in the market that just do that. But to your point, one of the problems with emphysema, which surprised me to learn this is that, when you have a really bad case, part of your lungs are actually essentially dead. They're not working at all. What can happen is, as you breathe in, air can get into some of the sacs in your lungs that are dead, and then it gets trapped there. Because of that, it's almost like a part of your lung that is not functioning becomes more and more inflated overtime, and that makes it harder and harder for the rest of your lungs, which are working, to take in and move oxygen. It's like fighting against the current. What Pulmonx did that was intriguing is they created this innovative medical device called the Zephyr endobronchial valve. That is inserted into the patient's lung minimally invasively, and it's a one-way air valve. It goes into the damaged part of the lung, and it's a valve that lets air escape, but it does not let air back into the valve, the damaged valve. What happens overtime is the air that's in there that's stale, that should not be in there, slowly starts to escape. That makes more room in the lungs for the rest of the lungs that are healthy to expand, so that you can get the most use out of the healthy parts of your lungs.
Flippen: That endobronchial valve, the cipher system, it's already been used in treatment for over 200,000 patients globally. It has a lot of research, a lot of studies that back it up. Of course, the concern being is, as you may tell from the market cap when we talk about opportunity. The market cap of this company, this is a very, very small business. I think they have just over $33 million in total revenue over the past 12 months. Despite having a lot of evidence that their solution works, they have to spend a lot of time convincing doctors and patients and treatment centers to recommend this valve and to monetize this valve. Certainly a great product, it's been slow to the upstart at least over the past year.
Feroldi: Yeah, that's an important point. Just given where this company is in the commercialization product. They have had over 20,000 patients in total that have used this since the technology was created in 2007, I believe. They are fairly new to the commercialization part of the business. When that happens, it takes a while to get your scale up and running. To your point, over the last year, the company has generated about 33 million in total revenue. What's interesting for investors here is that the gross margin is already impressive, it's basically over 70%. If you look over in 12 years, it's 65%, that's a pretty good number given that limited amount of revenue. However, if you look, the company is losing money, and that's why I think it's more risky than Progyny, its net loss over the past year was about $32 million. Offsetting that was the fact that the company does have $221 million in cash, it should be able to fund itself for quite a bit of time, but make no mistake, this company is probably going to be losing money for a good period of time.
Flippen: It didn't have the best year. You mentioned Progyny actually did well during the pandemic, at least better than what you expected, Pulmonx was challenged during the pandemic, when you think about this progressive disease, emphysema COPD. In order to get this procedure it requires beds at hospitals and elective procedures of which this would be considered one have been essentially turned off, but more importantly, ICU beds are being staffed for these pulmonary specialists that would also focus on COVID patients, which really just meant that Pulmonx was pushed to the back of the line over the past year, it's been materially hurt from the pandemic. However, the business heading into 2021 has actually started to rebound as ICU beds have opened up as people have gone back for elective surgeries, I think it's about as an overall for the company about 85% of where it was in 2019, but since this isn't international business, it really does depend on each of the locations and localities. Pre-pandemic, France was actually a huge market for them, that was doubling year-over-year, that's up 120% versus the 2019 levels, while still being significantly below where management thinks the long-term opportunity is.
Feroldi: Yeah. That's going to be a challenge if you're looking at trailing financials for this company. They are likely depressed, but I want to highlight a point that you just said, this is already an international business, they've been selling in several European countries and the U.S. for several years. That excites me as an investor, because a lot of times medical devices work in the U.S, but they don't necessarily translate into overseas, the fact that this company has already gotten over that hump, really sets it up for long-term success. When you think about how big this market could actually be, while this technology is only used on a small minority of patients with COPD, the market for COPD is so huge that they estimate that 500,000 Americans can qualify for this technology, and if you zoom out to the market that's already in, you can add another 700,000 to that opportunity. Combine that together, that's $12 billion in revenue potential. That's a big way up from $33 million in trailing revenue.
Flippen: They are just getting started in really critical markets, China being one, but Japan also, which I believe they have a targeted 2023 launch, they've already started hiring there. Their business that I think does about 50% North American U.S, 50% international sales right now, I would only expect for long term, that international sales to continue to be a larger part of the business even if it does revert a little bit over the short-term due to COVID normalization in the United States. Either way, I completely agree with your analysis of the market opportunity, certainly a great opportunity to be working in and it's hard to be upset about a company that can improve the quality of life for such a degenerative disease.
Feroldi: Yeah. Two other things that I thought were worth noting about this company, given the unique nature of the business, it has a fairly concentrated number of targets that it's going after the United States, they've identified essentially 500 hospitals and 800 pulmonologists in United States that they are looking forward to sell to, that's good because that means you don't have to hire a massive sales force to go after thousands of doctors to get the technology out there, on the flip side, if there's a large% of those few doctors that are holdouts, that can really hinder your long-term sales, but I do like that because this company is probably not going to have to spend gobs of money on sales and marketing to really get the message out there.
Flippen: Definitely. Lastly, but certainly not the least business that I believe we've talked about earlier, you've talked about on Industry Focus in the past. I know a lot of our listeners listening to us tape live today, have heard the name of this business, I'm going to let you lead off on the last company.
Feroldi: Okay. We're talking about Nanox or Nano-X Imaging, ticker symbol NNOX, Dylan, and I did just one show in this company soon after it came public, and we called it the Tesla of medical imaging, and why did we nail that title, because this was immediately a controversial stock, the stock went bananas soon after our episode, and went up to $90-something per share, along the way it was hit by not one, but two short seller reports and it's been all over the map. If you look at where this company is today, it's about a $1.5 billion company, and it is definitely the riskiest of the three stocks we're going to talk about, that's because this company has not yet gotten to the revenue stage, they are still pending FDA approval for the technology. Note that upfront, if you're interested in Nanox, it is hugely risky right now. But the reason that you should be interested in Nanox, is because it has developed what could be a breakthrough in medical imaging technology.
Currently, two-thirds of humanity does not have access to medical imaging technology, that's despite the fact that X-rays, which are incredibly useful in diagnosing diseases, including cancers, have been around for more than 100 years. Why is that? The No. 1 reason is cost. X-ray machines are still expensive to get up and running, they take up a big amount of space, and a big reason why is because the core technology that produces the X-ray, has not changed essentially since it was created. There's a filament inside an x-ray machine that is heated up to over 2,000 degrees, and then as a byproduct creates X-rays, and it takes a huge amount of machinery to cool down and control that 2,000 degrees heat. Conversely, what Nanox has developed, it actually purchased this technology from Sony, which spun it out into a different company, Nanox has spent eight years developing a silicon chip that produces the X-rays directly. A good analogy here, so think about the incandescent light bulb that was developed a 100 plus years ago that basically created heat and light as a byproduct, light was an accidental part, now we have LEDs, and LED are much more efficient because they just create the light, that is essentially the core technology that Nanox is making. Its chips just make the X-rays, it doesn't make the heat, then the X-ray as a byproduct. Because of that, they believe that they can reduce the cost of the extra machines by an order of magnitude. Some X-ray machines, some high-end CT scanners for example, currently cost about $2 million, plus another $150,000.
Flippen: No, they don't, that's ridiculous.
Feroldi: That's what the research says. It's crazy high, plus hundreds of thousand dollars in years in software and support cost, Nanox thinks that at scale, it's going to be able to make its machines for about $10,000, and because of that, it's estimating that its business model is going to be to give these away and then charge every time a scan is done. It's changing it from an upfront cost plus maintenance fee, to have this for free, then give us recurring payments every time you do a scan. That could be hugely disruptive.
Flippen: Despite having research to this company to some extent, clearly to talk about it today, I don't think I realized that the legacy equipment cost upwards of $2 million to equipment, it does give context for that number that management talks about with two-thirds of the population of the world not having meaningful access to this medical imaging technology, they even go a step further to say the majority of that remaining one-thirds, even in developed markets where you may have access, it can still take weeks and months to actually get the scan completed. If you decrease the upfront cost alone, but overall costs on a broader scale and charge per image, it's easy to see how suddenly imaging is this niche thing that you have to be really qualified to get it right, extreme circumstances, wait weeks or months, maybe you have no access to it all, to something that becomes really accessible, easier, and cheaper.
Feroldi: Yeah, and to be clear, not all x-ray technology costs $2 million. That's really the highest of that high-end CT scanners and stuff. You can get basic x-ray technology for much, much cheaper than that. But not as cheap as Nanox is essentially saying that it can produce this form. That's because inside a high-end CT scanner, there's a few $100,000 of equipment in there that just deals with cooling, just deals with dealing with that 2,000 degree heat. Again, by contrast, Nanox believes that at scale, it will be able to produce the entire device for $10,000. Because of that order of magnitude change in costs, that's why it says we can give these devices away for free and then charge with the scan. That's following a business strategy that I really have come to respect in the last few years called counter positioning. It's changing the business model of an industry so much so that your competitors would be harmed to switch. If they can pull this off I could see it developing quite a wide moat for Nanox.
Flippen: Okay, well, you have to drop the other shoe now, right? Because certainly this can't be as great as you've made it out to be.
Feroldi: Well, if you believe the two short reports that come out, this is all vaporware. That's why this has become such a battleground stock. Management is out there touting this technology as essentially the next greatest thing. We're just waiting on FDA approval. They actually say that they have thousands upon thousands of orders that are already placed in countries like Australia, Brazil, Mexico, Italy, South Africa, Taiwan, Spain, Belarus, and in the United States. They've signed a deal with Foxconn, aka the company that Apple uses to make the iPhone and the iPad to produce these products. That's how they believe that they can get to the scale. So they already have that major partner in place. However, there's been a lot of questions about the technology, like is this real, is this all a hoax? They claim that the founder is basically just nothing more than a showman and who knows what the ultimate outcome is going to be there? Because the company has yet to get this technology into customers hands and get through the FDA approval process. Hence, why this is an exciting product. But wow, is it risky right now?
Flippen: Completely understood. I don't think anybody listening really wants to buy into what could be the next Theranos. So personally, when I think about Nanox, I want to see it in action. I know they had, I believe it was investor day where they showed off the prototype, showed off the technology. I wanted to see it in action in practice with more hands personally before I'd be comfortable investing, but I can see for the right type of investors, somebody who has a high risk tolerance, a long time horizon, and it's OK taking a bet on a business that could be nothing or could be the greatest thing since sliced bread. I can see how that could be attractive.
Feroldi: Yeah, and the company believes that its current market opportunity is about $21 billion. But i could see that, again, if this technology is real and they can execute on their potential, I could believe that that could be dramatically underselling the potential because if they could get the cost of CT scans and x-ray down that low, the number of opportunities that could open up for further innovation really dramatically grows from there. To say nothing of the fact that there are literally billions of people out there that if they learn about this technology, could demand it. So from today's $1.5 billion market cap, if you told me that, yes, this technology is legit, I could easily see it being a 10x return or more.
Flippen: But if it's not legit, again --
Feroldi: Look out below. Yes.
Flippen: Always important, right? High risk, high return, but the risk is always still there. You've certainly made me excited about the business. Although the fact that they have no revenue, again, holds me up personally. I apologize, I have nothing else to add to the conversation other than my own hesitations.
Feroldi: That's completely fair. As I said with the initial show, I am an investor in Nanox. I did take a small position in it as soon as it came public, but I am not going to be adding to my position at all until after this company has FDA approval. I am more than happy to pay a much higher price and buy it at a much higher per market cap. Because of that point, the risk opportunity will be reduced significantly, and I'll also be happy to buy again once the gross margin turns positive. That way we can see that the business model is in fact working. There's nothing wrong with saying as an investor, this company is too risky for me right now, but I'll wait till it becomes less risky over time. That's a perfectly fine strategy.
Flippen: Awesome. Well, Brian, as always, thank you so much for coming on, providing your thoughts about these businesses. It's always a pleasure.
Feroldi: Thank you. I'm curious, Emily, which of these three stocks sings to you the most? Which of these passes the Emily Flippen test? Or did none of them pass? That will be perfectly fine too.
Flippen: You ruined my outro Brian. I was sneaking past that question in the outline. Thinking I can get out of this scot-free because I don't have a great answer for you if I'm honest. I think I'm too hesitant of an investor to buy into a company with no revenue, if I'm honest with you. I think that's just a matter of understanding my own level of risk tolerance. But if I was looking at the two Pulmonx and Progyny, I do think both of them are attractive investment opportunities, but I really respect the work that Pulmonx is doing. I think they have a great market opportunity just in the focus on severe emphysema. That alone, I think, could make me interested and probably tip me toward Pulmonx.
Feroldi: That's great. Another thing I absolutely love about these healthcare companies is they're easy to root for. They're curing diseases or they're solving big time medical problems. So if their technology works out, not only can you do well as an investor, but there's a whole lot of patients out there that'll be happy too.
Flippen: Awesome. Well, Brian, for real outro this time, thank you so much for coming on and putting me under the gun there.
Feroldi: Thanks for having me, Emily.
Flippen: Listeners, that does it for this episode of Industry Focus. If you have any questions or just want to reach out to say "Hi," shoot us an email at email@example.com, or tweet at us at @MFIndustryFocus. As always, people on the program may own companies discussed on the show and The Motley Fool may have formal recommendations for or against any stocks mentioned, so don't buy or sell anything based solely on what you hear. Thanks to Tim Sparks for his work behind the screen today. For Brian Feroldi, I'm Emily Flippen. Thanks for listening and Fool on.