Teladoc Health: This 'Expanding' Company Is A Long-Term Buy

Apr. 08, 2019 1:16 PM ETTeladoc Health, Inc. (TDOC)10 Comments
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  • Teladoc Health recently announced that it entered into an agreement to acquire a European telemedicine provider and that it had plans to expand into Canada.
  • The stock is not cheap, but I do not believe that Teladoc's growth prospects are fully baked into the price.
  • I am long Teladoc Health, and I plan to stay long the stock.
  • This idea was discussed in more depth with members of my private investing community, Going Long With W.G.. Start your free trial today »

Teladoc Health's (NYSE:TDOC) stock has underperformed the broader market so far in 2019, but shares have significantly outperformed the S&P 500 (SPY) over the last year.

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There are plenty of reasons to like Teladoc in today's environment - read this latest article for my thoughts on the company's bull case - but I believe that the recent announcements related to management's expansion plans should get investors even more excited about what the future may hold for this growing, disruptive company.

Expansion Plans - Welcomed News

On March 19, 2019, Teladoc agreed to acquire MedecinDirect, a Paris-based telemedicine service provider. The acquisition not only expands Teladoc's global reach, but it also brings several valuable virtual care services into the fold.

MedecinDirect is a market leader (partnerships with 40 of the leading insurance companies and almost 50% of the top 30 private medical insurers) with a well-established management team. Teladoc will have operations in the U.K., Australia, Canada (more on this below), Spain, Portugal, Hungary, China, Chile and Brazil so France will soon be added to a growing list. This acquisition is expected to help fuel Teladoc's global reach, which is a key driver to management's long-term strategy.

The news only got better when Teladoc announced that it launched telemedicine services in Canada, which will be the first company to offer these types of services in the country.

The MedecinDirect and Canada expansion news shows that management is serious about expanding services outside of the U.S. Yes, it is not a foregone conclusion that Teladoc will be successful with its international investments but, to me, this management team is taking steps in the right direction. It is entirely too early to determine what the recent acquisitions will mean for Teladoc's results over the next 12 months, but I do believe that the news is meaningful

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This article was written by

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Our President and CIO is a CPA with experience in public accounting and the financial services industry. He earned his Master of Accountancy degree in 2008 and his B.S. in Business Management in 2007. He is also a Level III CFA candidate. He has been intrigued by the market from the start. Over the years, he has learned that long-term investing is a discipline that, if followed, will help contribute to building lasting wealth. As such, most of our articles will be about the investments that we plan to hold for at least 3 to 5 years, as long as the company's story does not change. As a Seeking Alpha contributor, our main goal is to write about the companies that are key to our portfolio with the hope of promoting discussion (for or against the investment) from others within the SA community.Please visit our website for more information about W.G. Investment Research LLC.

Disclosure: I am/we are long TDOC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Disclaimer: This article is not a recommendation to buy or sell any stock mentioned. These are only my personal opinions. Every investor must do his/her own due diligence before making any investment decision.

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