ActiveCare: Growing Market Share May Move This Company's Stock

The growing trend of health care costs and overall health deterioration in the United States has been the focus of governments and corporations alike, on both the buy and sell side of health care.  ActiveCare ACAR manufacturers and markets medical solutions, including medical testing equipment, remote patient monitoring services, and mobile health monitoring services.  Its technology currently uses remote patient monitoring technology for the real-time monitoring of chronic diseases and physical conditions for members.  They have a “concierge service” that not only monitors the member/patient, but also interacts with them incase of a medical emergency or if the member/patient vital signs are beyond preset boundaries.

The last reported fiscal quarter, ending March 31, 2013 showed ActiveCare’s management and sales teams effectiveness by delivering to the company $4.8 million in revenues with over $900,000 in gross profit.  “[This is] a good indicator of the broadening acceptance of our Monitoring and Wellness Programs,” reports Michael Acton, Chief Financial Officer of ActiveCare. 

ActiveCare’s current member base is around 24,000, and according to their Press Release describing their second quarter results—released on May 16, 2013—management expects the number of paying members covered to reach 40,000 members by the end of this year.  Doubling the member base should give ActiveCare an annualized top-line number of over $8 million.

The stock has been flat for most of the first half of this year, trading 50% below its 52-week high.  Trading volume has not been responsive to the company’s news, which isn’t a metric against future expected performance of company fundamentals, but a lack of research coverage by Wall Street analysts.  I expect that to change once ActiveCare repeats its pace of growth and Wall Street will not have a choice but to take serious note of this company.

Outlook

ActiveCare has surreptitiously become the world’s largest provider of cellular glucometers. This shakes up an industry led by conglomerates, which include GE and Honeywell.  How ActiveCare edges them is in the monetizing of patient data.   The management of ActiveCare has been able to take the data from patients and offer transparency into their member population, which translates into cost controls for insurance companies and self-insured organizations.   This move to data commoditizing will lead ActiveCare to be a formidable player in the patient monitoring sub-industry of Healthcare Equipment.

The growth of ActiveCare’s enterprise is aided by current political and corporate pressures to cut healthcare costs and find solutions to a growing diabetic populations, whose issues and complications from the disease could cost insurers over $500,000 should the patient need multiple invasive procedures.  By offering transparency, ActiveCare gives insurers an angle to keep costs low and reduce political risk—such as future implications of Obamacare—which could translate into an explosive customer base for the company.

Following a record-breaking quarter for the company, the stock has a lot of room to move.  Once Wall Street can appreciate the impact ActiveCare will have on the overall financial health of insurers around the country, expect the shares to reflect that fact in a short amount of time.