Buying a growth stock in the midst of this downturn can set investors up for some great gains later on.
And to find some of the best deals, oversold stocks can possess the most upside. A metric investors can
use to find oversold sticks is the Relative Strength Index, or RSI.
RSI looks at a stock’s price movement over the past two weeks of trading. The more selling activity there
has been compared to buying, the lower the RSI value is. And one top growth stock that is in oversold
territory right now is DexCom (NASDAQ:DXCM). At an RSI of less than 30 (the cutoff to mark whether a
stock is oversold), the healthcare stock has been under significant selling pressure of late.
DexCom makes continuous glucose monitoring devices that help patients manage diabetes. With the
growing prevalence of diabetes and cases only likely to rise in the years and decades ahead, DexCom
could be in a prime position to continue generating strong numbers. From revenue of $719 million in
2017, the company’s top like has more than tripled since then to more than $2.4 billion this past year.
Although the company netted just $155 million of that as profit, with strong gross margins of more than
65%, DexCom’s bottom line is likely to get stronger as the business expands over time.
Plus, diabetes is a chronic condition that patients need to stay on top of, which is why this could be a
resilient stock to hold for the long haul. Although its shares are down more than 45% year to date,
DexCom’s fundamentals remain strong and this could be an underrated stock to buy for the long term.
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