Opinions

Jim Cramer - Mad Money Dexcom DXCM-Q DON'T BUY Sep 15, 2023

Does well when (sadly) diabetes is booming. The fear is that drugs develop from Novo Nordisk and Eli Lilly will cut down on diabetes. He tends to agree. Be careful here.

Jim Cramer - Mad Money

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HOLD

Medical devices. Monitor diabetes. Recurring revenue from disposable sensors. M&A potential. Really likes the sector. Stick with it.

COMMENT

The stock got overheated and has pulled back. It's up over 50% YTD. The quarter they reported in late-October was imperfect with a big earnings beat but a smaller sales beat compared to previous quarter. Their new blood sugar monitor is rolling out in only some key markets in 2021, not in all key ones until 2023. Both factors led to the stock getting hurt. Today, management guided for 15-20% growth through 2025, but fell short of expectations. The stock sold off today.

BUY

They make blood-sugar monitor for diabetics. He has long liked this. Performed well last year until Covid delayed the development in their new device which happened when the market lost interest in health stocks. But a few months ago, it started to come back. Yesterday, they reported a mixed quarter with a nice revenue beat, but small earnings miss, yet offered conservative guidance expand overseas. It fell 5% today. Likes that they're spending money to grow and their conservative nature.

COMMENT

They make blood sugar monitors used by diabetics. One of the best growth stocks of the last 5 years, from $60 from end-2017 to $659 last November. Since then, it's plunged to $462. Today, the company reported Q4 sales were in line and issued cautious guidance for 2022. They under-promise and over-delivered.

COMMENT

Shares are expensive, but their diabetes machine is the best. Likes it, but these expensive stocks have had a hard time in this market.

DON'T BUY

The Saudi/OPEC oil cut today

He regrets he didn't sell some of his oil holdings today. He doesn't see the price of oil moving up from here, but will move down.

BUY ON WEAKNESS

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

DXCM has been hit hard as investors fear new success of weight loss drugs will reduce demand for diabetes monitoring products. DXCM is not alone in the decline. But it is still growing, and recent comments by analysts suggest the sell off is quite overdone. It has new products on tap and is strong financially. Market share remains robust. Best Buy has started selling its products (not material on its own, but shows an expanding footprint). We would see DXCM as worth holding. Because it is 33X as large was WELL, they are hard to compare. WELL, being smaller, could potentially rise more, but comes with much more overall risk. From a safety and valuation standpoint, we would, today, prefer DXCM.
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DON'T BUY

Their quarter missed badly and they haven't fully explained why.

DON'T BUY

Their last quarter was very bad. He lost faith.

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Jim Cramer - Mad Money Dexcom DXCM-Q DON'T BUY Sep 15, 2023

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