Are you interested in a stock with the potential to double in price in the next 12 months and go up from there…… while offering you protection when the market corrects?
The Value Investor that’s been quietly crushing the S&P 500 shares one of his top stock picks.
The last time we recommended a healthcare stock, it was Orbotech Ltd (Ticker: ORBK) in April 2017. At that time the stock price was $30.17 One year later in April of 2018 the stock reached a high of $62 a share. We removed the stock from our highlighted stock list near the high price due to the proposed acquisition by another company.
The stock we’re presenting to you today is the first healthcare stock since Orbotech that we feel has the same potential. It may or may not turn out the same, but it’s shaping up similarly. It offers both the opportunity for significant price appreciation in the short-term along with downside protection to deal with today’s volatile markets.
It’s the type of under the radar stock that’s made our investors so much money over the years.
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The Worthington Stock Letter has been handing out some of the best value stock picks since Warren Buffet came along. Highlighted stocks in the award-winning Worthington Stock Letter have beaten the S&P 500 nine out of the last ten years by an average of over 4%, enough to make someone wealthy over time.
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A Winning Stock For Your Consideration
We realize it’s a risk to share only one stock out of the many we highlight in our newsletter. Although it could turn out to be one of our best, it could also turn out to be an average performer going forward. No one can predict the future as we near the tail end of one of the most prolific bull markets in history. But if the past is any indication, we like our chances.
Without further ado, we present Masimo Corporation.
Company: Masimo Corporation (Ticker: MASI)
Exchange: Nasdaq (S&P Midcap 400)
The opportunity (quick version): MASI is a leader in the pulse oximetry space. The market for self-monitoring healthcare equipment and software for patients continues to grow globally due to an aging population along with health care and insurance providers looking to lower costs.
Masimo uses the razor/razorblade model whereby they provide their equipment to hospitals at little or no upfront cost, and in return, the hospitals agree to purchase X number of sensors for X number of years at Y price from Masimo. This locks in sales creating an annuity of income for years to come.
Within the past year, Masimo has signed on three additional major hospitals and is expanding further into global markets. This has resulted in Masimo once again having to upgrade revenue guidance.
MASI has successively increased sales and gross income over the last four consecutive quarters, beating consensus earnings estimates in the last two quarters by 31.6% and 29.6% respectively. This is a company that both analysts and investors have been underestimating as evidenced by the earnings beats. Masimo is just starting to enter the cerebral monitoring space with the market potential to create an additional $400-500 million in revenue.
A nice side bonus is that when the market corrects again (you know it will), MASI offers downside protection for you by providing recession proof, low-cost medical solutions with an annuitized income stream. MASI demonstrated this downside price protection holding a high relative price strength compared to the rest of the market during the last two corrections.
Side Note: We provide more detailed research on all our stocks in our newsletter along with monthly updates.
While there are no guarantees, this stock is setting up to act like some of our past highlighted stocks that went on to huge gains. They are too numerous to mention, but some we have highlighted include Priceline (PCLN), NetEase (NTES), Stamps.com (STMP), Tower Semiconductor Ltd. (TSEM) and Orbotech Ltd. (ORBK). They all doubled in price in less than a year and went on to much more significant gains from there.
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