Buying more shares of one of your winning investments can feel good. Aside from confirming your commitment to a smart decision from before, you also ideally get the enjoyment of seeing the stock's next leg of growth. 

On that note, I've been a shareholder of the medical aesthetic device company InMode (INMD 4.74%) for several years now, and last week I increased the size of my position by 10%. Here's why I plan to buy even more soon. 

Performance is strong, and catalysts are on the way

InMode makes devices that plastic surgeons and other practitioners of medical aesthetics use to liquefy fat, tighten skin, tone muscle, and remove unsightly hairs. Its less-invasive technology entails less down time for patients in comparison to getting plastic surgery or liposuction. That can make it a popular choice when patients have access to it. 

Over the past three years, InMode's net income has risen by 115%, topping $161 million in 2022. To generate that growth, it sold its workstations globally. Then, as its research and development (R&D) efforts yielded new devices and accessories to use with existing products, it sold those too, generating significant recurring revenue from customers buying newly minted consumables to use with their hardware.

The razor-and-blade business model has been working quite profitably so far, which is one of my prime reasons for owning the stock in the first place, not to mention buying more. And there's no sign that it's going to stop executing on its successful business model anytime soon, especially with an interesting catalyst that management now claims is in play.

You've probably heard of new weight-loss drugs like Ozempic, which is made by Novo Nordisk. But did you consider that after people lose a lot of weight, their excess skin can linger afterward? InMode sees demand surging for its skin-tightening workstations, like the EvolveX, as a result of a growing population of post-Ozempic patients seeking to finish their transformations. It's unclear exactly how much additional demand the rise and proliferation of these weight-loss drugs could pass through to the company, but there are already a few positive signs that it'll be plenty.

Per its second-quarter earnings report, the company brought in just over $136 million in sales, up 20% from the prior-year period. For the whole year, it's anticipating up to $540 million. That might not sound like much, but the weight-loss revolution is just getting started.

It's still valued on the cheaper side too

Another reason I'm buying more shares is InMode's valuation. Its price-to-earnings (P/E) ratio is 23, which is just over half the medical device industry's average P/E of 45. While that's not exactly the same screaming bargain as around this time last year, when its P/E was close to 11, it's currently low enough to entice both value and growth investors. And that's a fairly uncommon combination in the market that I don't expect to persist much longer.

There are a few relatively small risks involved with buying shares of InMode right now. First, competitors could develop new technologies that are better and would allow them to steal its market share. Second, its attempts to pioneer new technologies or devices itself could be frustrated if regulators at the Food and Drug Administration (FDA) deny its requests for commercialization.

Neither of the above has happened yet, but neither of those risks will diminish much over time. There's also a risk that its robust pace of growth creates expectations that are unsustainable or ultimately unmatchable with its financial performance. But shareholders will see that coming from a mile away as the valuation would need to climb to unrealistic heights in the course of such a situation developing. 

In light of the above, I'm adding to my position with confidence, and I'll continue to do so. If everything goes according to management's plan, this company will keep expanding for years and years, and I'll be holding it the whole time.