This rabbit hole could lead to $200,000!
What I'm discovering on this unexpected journey.
Who doesn’t love a good penis pill?
You probably weren’t expecting that while sipping your coffee, but let’s be honest. A lot of you are here today — or perhaps perkier this morning — because of them.
Sexual health and wellness can be a taboo subject — especially over breakfast — but it shouldn’t be. Men’s health matters too, and society is slowly embracing that belief rather than mocking common conditions.
Little blue pills are also big business.
I invested in one company last week that could make us a small fortune.
That company is Hims and Hers Health.
It’s a fast-riser in the telehealth industry and provides much more than just potent blue pills. The company’s mission is to eliminate stigmas around health and wellness issues and break down barriers to quality healthcare.
Hims and Hers Health, often referred to individually as Hims or Hers, provides more than just prescriptions. They also offer over-the-counter medications and personal care products that address hair loss, weight loss, skin care and mental health.
Since its founding in 2017, the company has aimed to disrupt the healthcare industry. And it just might.
After netting a 103% profit off the company on an options contract last week, Hims commanded my complete attention.
I journeyed down a weekend-long rabbit hole to learn more about the company. While millions subjected themselves to Mike Tyson’s buttchecks on Netflix on Friday night, I was studying.
I read articles, devoured social media deep dives and binged YouTube videos of old interviews with Andrew Dudum, the co-founder and CEO of Hims and Hers Health.
One Reddit user likened Hims to Amazon when it merely sold books and Netflix when it was the little guy to Blockbuster as the baddest movie rental business on the block.
Two social media influencers claim the company has 100X potential. That means that the stock could multiply 100 times over today’s price.
Hyperbole? Maybe.
Maybe not.
Hims’ stock closed at $19.32 per share last Friday. In order to 100X, it would need to grow into an almost $2,000 stock. Today, that sounds far-fetched. In 10 years, who knows?
I believe in the future of telehealth, and I feel I’m getting in on the ground floor of the untapped industry. The COVID-19 pandemic showed how much more efficiently everything can be done electronically. Doctor visits for routine care appointments and prescription needs are areas that can easily be improved.
That was my reasoning behind purchasing 100 shares of the telehealth company Teladoc between July 2023 and August 2024. That was before I knew any better. The stock is down 43% over the past year and 88% over the past five years. It feels like I’ve weathered the worst. I won’t budge now. I’m holding, confident that the company will turn around in the long run.
A bit more research could have saved me from investing $1,250 in a stock many experienced investors consider risky.
That’s why I spent my weekend dissecting Hims.
I purchased 75 shares of the stock Friday, making Hims the first growth stock in my Roth IRA. I plan to add another 25 shares soon, and I’m thinking of doubling my initial investment to push our stake to 150 shares.
At our average purchase price of $19.50, a 100X return on 150 shares would bring the total value of the investment to $292,500.
If the stock price rises to $195, a more realistic 10X, we’d still gross $29,250.
While growth stocks like Hims offer high potential, they come with increased risks. Factors like competition, regulatory risks and market volatility could impact the value.
But I wasn’t simply chasing profits when I invested $1,464 into Hims last week. I was purposely investing into my education. I was giving myself incentive to learn how a business works.
Everything about Hims’ balance sheet looks spectacular, according to people with far more investing chops than me. And those are the best companies to invest in.
Delving into Hims gave me an unexpected crash course in understanding the financial health of a company. In investing, it’s called fundamental analysis.
I’ve flooded my brain over the past 72 hours with phrases like valuation, gross margin, full-year guidance and escape velocity. Acronyms like EPS, KPIs, CAGR and TAM are now etched into my lexicon.
Watching debates over Hims and whether Amazon’s presence in pharmaceuticals poses a threat taught me what a real investment thesis looks like.
I’ve learned the power of strong management, stellar earnings, zero debt and a steady buildup of free cash flow.
I’ve learned that Hims has rapidly achieved it all.
There’s no better company on the market to help us grow — both in our portfolio and in our understanding of how business and investing truly work.
Disclaimer: The information contained on Money Talks is not intended as, and should not be understood or construed as, financial advice. I am not an attorney, accountant or financial advisor. These are my personal experiences, and neither this website, newsletter nor podcast is a substitute for advice from a qualified professional.
Thanks for this!