Health Care Is Going Digital and This Stock Will Benefit

What can't you do on your smartphone today? No matter the time of day or the location, you can deposit checks, order transportation and meals, and organize the most intimate details of life in the palm of your hand.

Despite the prevalence of fitness trackers and apps to log your sleep or daily calorie intake, more serious forms of health care haven't quite kept up with the virtualization trend. If you're sick and need to talk to a doctor, you still need to get yourself to your physician's office and wait to see him or her.

According to one analyst, of the approximately 1.4 billion annual encounters between health-care providers and patients in the U.S., all but roughly 10 million occur in a physical setting. That system is far from perfect—doctor’s visits are expensive and time-consuming, even for a minor issue. Wells Fargo estimates that close to a third of encounters can happen virtually, over voice or video chat.

As I wrote on Barrons.com today:

Teladoc Health (ticker: TDOC) sees opportunity in that gap. The $4.2 billion market cap company is the industry leader in virtual care—or “telehealth”—and expects to have roughly 38 million members completing four million virtual visits on its global platform this year. It has partnerships with over 12,000 health plans, self-insured employers, and hospitals and health systems.

For a flat fee of $45 per visit, Teladoc members have access to on-demand virtual appointments via over 50,000 board-certified doctors who can address everything from common cold and flu symptoms to backaches, skin infections, depression, and addiction. The doctors can prescribe medications and send them to a patient’s local pharmacy.

Teladoc's revenue growth has been explosive and its market opportunity is huge. It has several internal levers available to it to increase its use, broaden the breadth of its services, and become more efficient to expand its profit margins. And its stock trades at a discount to comparable companies.

That's Teladoc's opportunity. For the opportunity for investors, read the full stock pick over at Barrons.com.