What Happened?
A number of stocks fell in the afternoon session after worries over worsening trade relations with China were triggered by critical comments from President Donald Trump.
The president's tone and the suggestion of canceling a meeting with President Xi caused a rapid sell-off in the market. The trade dispute flared up after China imposed export controls on rare earth minerals, which are critical components for high-tech manufacturing. The escalation of the trade war raises concerns about supply chain disruptions and increased costs for technology companies, which are heavily reliant on global trade, leading to a broad sell-off in the sector.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Patient Monitoring company DexCom (NASDAQ: DXCM) fell 3.7%. Is now the time to buy DexCom? Access our full analysis report here, it’s free for active Edge members.
- Patient Monitoring company Masimo (NASDAQ: MASI) fell 3.3%. Is now the time to buy Masimo? Access our full analysis report here, it’s free for active Edge members.
- Medical Devices & Supplies - Specialty company Integer Holdings (NYSE: ITGR) fell 3.5%. Is now the time to buy Integer Holdings? Access our full analysis report here, it’s free for active Edge members.
- Senior Health, Home Health & Hospice company The Pennant Group (NASDAQ: PNTG) fell 3.4%. Is now the time to buy The Pennant Group? Access our full analysis report here, it’s free for active Edge members.
- Branded Pharmaceuticals company Organon (NYSE: OGN) fell 3.2%. Is now the time to buy Organon? Access our full analysis report here, it’s free for active Edge members.
Zooming In On DexCom (DXCM)
DexCom’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock dropped 7.4% on the news that a short-seller report from Hunterbrook Capital alleged issues with the company's G7 glucose monitoring device, questioned its accounting, and highlighted an executive exodus.
The report claimed that complaints about the G7 device led to the creation of a Facebook group that attracted over 58,000 members in just over a year. Hunterbrook asserted that some doctors stopped prescribing the G7 due to "disproportionate sensor inaccuracies, repeated device failures, connectivity issues, and problems with the adhesive." The short seller also raised flags about DexCom's accounting, suggesting the firm used aggressive tactics to surpass second-quarter earnings estimates.
DexCom is down 16.6% since the beginning of the year, and at $65.44 per share, it is trading 27.9% below its 52-week high of $90.75 from February 2025. Investors who bought $1,000 worth of DexCom’s shares 5 years ago would now be looking at an investment worth $664.06.
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