The Biggest Problem With Investing in Teladoc
As the COVID-19 pandemic keeps people home, the demand for virtual care services appears to be on the rise. And one company that's benefited from that is Teladoc Health (NYSE: TDOC). The New York-based healthcare company's been a hot investment this year, with its share price surging 160% so far in 2020 -- well above the near-flat returns the S&P 500 has produced thus far.
While it's tempting to jump aboard the bandwagon, there's one big reason long-term investors should think twice before buying in, and it has nothing to do with valuation. It's the company's lack of moat.
Moat is something Warren Buffett fans are familiar with: It refers to a company's ability to hold a competitive advantage over its peers. The billionaire investor values companies that enjoy a large moat, because it means they'll be able to ward off competitors.
Source Fool.com
