Here's one of the many great truths about investing. You don't need an enormous amount of cash to start -- or even continue -- on your path to wealth. With just about any amount, you can get in on some exciting stories or add to your current positions.
Right now, let's consider $100. With that, you can buy shares of two exciting growth stocks in the healthcare sector. I'm talking about telemedicine leader Teladoc Health (TDOC 3.31%) and aesthetics device maker InMode (INMD 1.34%). Both of these companies offer a bright future, and today, they offer you a bargain price. Let's find out more.
1. Teladoc Health
Teladoc specializes in virtual medical visits and sells its plans to companies and organizations. In fact, more than half of Fortune 500 companies use Teladoc's services. Teladoc also sells its BetterHelp mental health online consultations directly to consumers.
Both of these offerings have led to quarter after quarter of double-digit growth in revenue and visits. What's weighed on the stock is the fact that Teladoc hasn't yet turned that revenue into profit. And the company's purchase of chronic care specialist, Livongo, back in 2020 resulted in billion-dollar, non-cash, goodwill-impairment charges last year.
As a result, Teladoc shares have dropped more than 60% over the past year. And today it's trading at its lowest ever in relation to sales. This is a huge buying opportunity considering Teladoc's leadership in the market and its growth potential. It's important to remember the telemedicine market is growing in the double digits. And Teladoc, as a leader, should benefit from that over time.
Also, Teladoc has made progress in key areas, such as chronic care. Almost half of Americans suffer from at least one chronic illness. So, Teladoc's move to ramp up its services through the purchase of Livongo could eventually pay off. In the most recent quarter, Teladoc's chronic-care enrollment increased 16% from the year-earlier period.
The company also should benefit from its focus on treating the "whole person" by providing both primary care and specialties. All of these points are setting Teladoc up for success over time, and that could equal gains for shareholders too.
2. InMode
InMode makes devices using radio-frequency technology for various aesthetics and wellness procedures. These include treatments to tighten skin and reduce sunspots as well as treatments to improve circulation and relax muscles.
The medical device company serves an expanding market. The non-invasive aesthetics market is forecast to grow in the double digits through 2030, according to Precedence Research.
InMode already is benefiting. The company has reached an annual revenue-run rate of almost $500 million. Revenue and non-GAAP net income hit record levels for the full year 2022. (The company advised investors to refer to the non-GAAP measure due to one-time tax events.) InMode also reported a generally accepted accounting principles (GAAP) gross margin of 84%.
Today, capital equipment sales surpass that of consumables. But consumables sales are growing, and this is key. That's because these tools needed for procedures on InMode devices represent a source of recurrent revenue.
To further boost growth, the company aims to regularly launch new uses for its workstations. For example, it's conducting six clinical studies for its EmpowerRF platform that offers women's wellness treatments. EmpowerRF already has surpassed InMode's revenue expectations, bringing in $45 million last year instead of the expected $20 million.
InMode aims to launch the Envision platform for ophthalmology in the U.S. in the first half of this year and the next-generation Evoke for face treatments in the second half.
Now here's the great news: You can pick up shares of this high-growth player for a song right now. The stock is trading for only 11 times forward-earnings estimates, down from about 24 a year ago. Considering InMode's performance so far and its growth prospects, a small investment now could lead to big returns down the road.
