Investopedia: DexCom Shows Diabetes Still A Growth Industry

Today's diabetes market highlights the importance that individual stock selection still has in successful investing. While it may very well be generally true that overall sector movements explain a lot of an individual stock's performance, that has not been the case in this market. While the overall tone and tenor has been pretty negative, select names like Novo Nordisk (NYSE:NVO) and DexCom (Nasdaq:DXCM) have done quite well indeed. 

A Strong End to DexCom's Year
It has not all been smooth sailing for DexCom (the stock took a spanking late in 2010), but the company continues to build its emerging continuous glucose monitoring business. For the fourth quarter, total revenue increased 49%, while product revenue more than doubled from the year-ago level and rose 26% sequentially. DexCom also saw an encouraging jump in the sale of its start kits, to the tune of 24% sequential growth.

As the company increases its sales, it is beginning to see some operating leverage. Gross profit on product sales increased nearly five times (again, on a doubling of revenue) in the fourth quarter, when compared to the prior year. At the same time, the company has kept a lid on SG&A spending while still investing significant resources into R&D. All told, the company produced an operating loss more or less in line with the prior year's level. 


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