Medical device companies can be excellent investments thanks to their unique mix of innovation-driven development, solid margins, and massive appreciation potential. Still, investors would do well to avoid businesses that feature some of the industry's bugbears like indebtedness, overly high valuations, and small addressable markets.
On that note, DexCom (NASDAQ: DXCM) has some of the trappings that can make for a winner. Its returns have crushed the market over the last five years, with its shares rising by more than 487% against the market's rise of nearly 106%. Could it repeat this feat in the future? In my view, it's possible, but that doesn't necessarily make it the right stock for everyone.
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