1. DexCom, Inc. (NASDAQ:DXCM)
Number of Hedge Fund Holders: 70
DexCom, Inc. (NASDAQ:DXCM) is a medical device company that specializes in the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The stock benefited from the Q4 results that beat on the bottom line. It is one of the best medical stocks to watch.
On March 27, JPMorgan raised its price target on DexCom, Inc. (NASDAQ:DXCM) to $257 from $235 and maintained an Overweight rating on the company’s shares. The firm thinks that DexCom, Inc. (NASDAQ:DXCM) is still in a good position after Q4, but it has adjusted the multiples and ratings of the managed care group to align with historical levels.
According to Insider Monkey’s fourth quarter database, 70 hedge funds were long DexCom, Inc. (NASDAQ:DXCM), compared to 62 funds in the last quarter. Ken Griffin’s Citadel Investment Group is a significant position holder in the company, with 2.23 million shares worth $252.8 million.
The Brown Capital Management Mid Company Fund made the following comment about DexCom, Inc. (NASDAQ:DXCM) in its Q4 2022 investor letter:
“DexCom, Inc. (NASDAQ:DXCM) develops market-leading continuous glucose monitors (CGMs) for diabetics. On Dec. 8, DexCom received Food and Drug Administration (FDA) approval for its next-generation G7 device for all diabetes, including Type 1 and Type 2. The G7 device will launch in early 2023, with the company working to expand reimbursement coverage for the product. We expect the commercial Durable Medical Equipment and Medicare channels to provide coverage relatively soon following approval, with commercial pharmacy coverage coming sometime in the second or third quarters of 2023. The G7 device has some powerful form factors that should generate new patient demand. The G7 device is 60% smaller than the G6, with only a 30- minute warmup period, and both attributes are superior to their main competitor, Abbott’s Libre 3 device.
Also, The Centers for Medicare and Medicaid (CMS) has issued a draft coverage-determination proposal that would expand coverage for CGMs. Under the proposal, the CMS would cover CGMs for diabetes patients who are treated with insulin or “have a history of problematic hypoglycemic,” as defined by the frequency or severity, regardless of whether they have Type 1 or Type 2 diabetes. DexCom should benefit from this expanded coverage.
Given the FDA approval of G7, this helps position DexCom for durable long-term growth, especially with other new products as well as Total Addressable Market (TAM) expansion opportunities. DexCom has put up impressive growth numbers despite the backdrop of macroeconomic, inflationary and currency headwinds. We still believe the business is undervalued in the context of its long-term growth potential and operational levers.”
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