Diabetes Management Leader Insulet Eyes 261% Growth As It Sets Up New Buy Point

After delivering 150% earnings growth last quarter, Wall Street estimates call for diabetes management leader Insulet (PODD) to post a 261% EPS spike for the full year. That has PODD stock setting up a new buy point.

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Based in Massachusetts and founded in 2000, the innovative medical device firm makes life easier for people with diabetes and other conditions. It helps people manage diabetes through its revolutionary Omnipod Insulin Management System.

Through the Omnipod product platform, Insulet provides a unique alternative to traditional insulin delivery methods. With a simple, wearable and waterproof design, the disposable Pod provides up to three days of nonstop insulin delivery, without the need to see or handle a needle.

Insulet also leverages its Pod by tailoring its Omnipod technology platform for the delivery of non-insulin, under-the-skin drugs across other therapeutic areas. By breaking down the barriers to insulin pump therapy, Insulet aims to deliver a superior treatment option and lifelong health benefits for people with diabetes.

In September, the firm announced it received CE marking under the European Medical Device Regulation for its Omnipod 5 Automated Insulin Delivery System for individuals aged two years and older with type 1 diabetes. (CE is an acronym for the French “Conformite Europeenne,” which certifies that a product meets EU health, safety, and environmental requirements.)

Insulet In Demand Within Strong Industry Group

Hampered by sporadic earnings growth and a middling “C” SMR Rating, Insulet still earns a 91 Composite Rating in Stock Checkup.

Fellow leaders in the medical products industry group include Merit Medical Systems (MMSI), Dexcom (DXCM) and Abiomed (ABMD), each rating a 95 or better Composite Rating. Last month, Johnson & Johnson (JNJ) announced it will acquire Abiomed.

The industry ranks a solid No. 25 among the 197 groups IBD tracks.

Attracted by analyst estimates of 261% earnings growth for this year, institutional investors have shown demand for PODD stock. Insulet sports a “B” Accumulation/Distribution Rating and a 1.1 up/down volume ratio. Plus,  50 funds with an “A+” rating from IBD own shares of the stock.

PODD Stock Joins Peers Crafting New Buy Zones

After hitting a new high in November of last year, Insulet entered a rocky period where it formed a 40-week double bottom. The stock went on to form a cup pattern with a 283.38  buy point.

Insulet gapped up to clear that entry after posting 150% earnings growth on Nov. 3. It soared nearly 23% in one day on that report, then eased back to digest those gains.

While Insulet filled much of that gap-up, it found support at its 21-day line while continuing to form its current and still early-stage flat base. Early Friday, the stock is testing support at the 21-day benchmark. The new buy point is 320.10.

The relative strength line retreated while the flat base formed but is trying to approach a new high.

Meanwhile, Merit Medical is testing a new buy zone. The medical device maker was featured in this Nov. 18 column.

Dexcom is also setting up, further confirming strength in the group,

Follow Matthew Galgani on Twitter at @IBD_MGalgani.

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