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Saturday, September 4, 2021

Teladoc (TDOC): Only a video call with a provider? Think again!

Today I am taking a deep dive into Teladoc Health to see whats under the hood. We will look at the company and its subsidiaries to see how they are connected. We will assess if there are synergies between the various business divisions and see if there are clues to further opportunities.

First, background: We will be working with a semantic network model of Teladoc ecosystem. Each node is a tangible concept or entity. Lines connecting the nodes are relationships between any two entities. Thus, if 2 entities are related, there is a line connecting 2 nodes. This type graph is called a network and is an excellent tool to represent relationships between 'things'. Moreover,  this is an unsupervised graph, meaning, the placement of the nodes is by mathematical modeling as opposed to human bias. The information in the relationships decides which node is placed where.

A big reason to do this is to understand the underlying business and to get a sense of scale, interconnections and inter-dependencies. Connections can make a company strong or can drag it down to oblivion if it does not have positive synergies. That being said lets begin - 

 

Click on image to Zoom


Lets orient ourselves to the model.

  1. Teladoc: Provider of virtual care to patient, shown in dark green nodes
  2. Betterhelp: Provider of online counseling and therapy, cyan nodes
  3. Mystrength: Employer based digital program for behavioral health, red nodes/shape
  4. Livongo: Connected devices for preventative care, light blue nodes
  5. HealthierYou: App platform for all-in-one healthcare needs, purple nodes
  6. Intouch Health: Integrated virtual care experience devices for providers and hospitals, light green nodes.
  7. MedecinDirect: Teladoc clone for France, yellow node (did not replicate the subnodes for sake of clarity)
  8. Hospital to home: My speculation. Post discharge care, potential opportunity, area of need (grey nodes)

Impressions from the network model:

1. Teladoc has built a healthy ecosystem since going public in 2015. The various domains (represented in the shaded colors) are either core businesses which Teladoc acquired (e.g. Betterhelp, Livongo or InTouch) or which it has developed.

2. Teladoc's mental health arm overlapping with Livongos connected care has lead to development of MyStrength Complete. As seen in figure, this was a brilliant move to utilize a preexisting resource of mental health professionals including counseling professionals with connected care components of Livongo. I envision, a similar foray into connected devices for weight management, diabetes with their wellness care, primary360 and medical care. This would be a huge increase for TDOC in terms of total addressable market (TAM). Their recent agreements with several insurers may tap into this market but no formal product (such as mystrength complete for mental wellness) has been announced for diabetes, hypertension. I think this will be a matter of time before they come up with a unified digital program for these other diseases.

3. Few interesting observations for Teladoc core (green) segment. Wellness care is huge and these topics like nutrition, smoking/tobacco cessation are going to be key connecting pieces with other Livongo modules. Also Telederm (virtual dermatology) is a big opportunity. A high resolution photo of a skin condition can offer a dermatologist a preliminary idea about whether the patient needs to come in or can be managed virtually. This would be a billable visit with subsequent revenue downstream is exam or biopsy is needed.

4. The HealthierYou app ties in with core Teladoc by finding a provider 24/7 or a general medical service. It also allows for low cost prescriptions by connecting to pharmacy and connection to insurance. Thus this takes care of the 'peripherals' associated with a medical visit.

5. Intouch is a whole another ball game which has the potential to change critical ways in which outpatient and inpatient medicine is practiced. Intouch Solo is a platform for providers (registration, scheduling, visit, etc) which can tie in with Electronic medical records (EMR). Telehealth devices are solutions for hospitals where virtual care can be brought to the location. Many of these devices can be outfitted with sensors which can assist an remote physician specialist to get vital information to make judgement calls. for example, the cardiology module can have a digital stethoscope and an Electrocardiogram (ECG) machine attached to the device providing telemetry data. 

6. It is my speculation that the next area that Teladoc will focus are patients who are post hospital care and discharged to home. The hospitals are penalized if a patient is readmitted to the hospital after discharge for specific conditions. Also longer admission are financial drag to hospital and burden to patients, plus risk of hospital acquired infections for longer inpatient admissions is real. With these factors, optimal timing of discharge to home and keeping patient from coming back to the hospital is a critical unmet need. With Teladoc's, access to specialists, Intouch's virtual care telehealth devices, it is possible. My suspicion is kindled by hiring by Teladoc of Claus Jensen(Chief Innovation Office) in April this year (2021). This is what Jason Gorevic CEO said "“We are excited to welcome Claus to the Teladoc Health team to lead our innovation efforts,” said Jason Gorevic, Teladoc Health chief executive officer. 

“With deep experience transforming hospital systems and health plans, Claus is the right leader at the right time to accelerate Teladoc Health’s vision of connecting the healthcare experience from hospital to home."
So do you still think Teladoc (TDOC) is only a video call with a provider?

I own shares of Teladoc (TDOC). The data were collected from publicly available sources online and from company websites.

Friday, September 3, 2021

Palantir (PLTR) - A network of Palantir contracts

Palantir is by far my most favorite stock. I understand what they do. I knew of them before they IPO’d and as soon as they did, I bought. It was the single largest individual stock buy. I saw it dip and sputter leading to a lot of chatter on the internet. It even made to a meme stock status. Then finally, I saw it soar and find its footing to where its at today. My conviction is solid and I am not going to share a single share for next 20 years.

Palantir works with data. Many industries and sectors generate a ton of data. Palantir helps to understand the data. It works with the information to identify pain points and improve processes. This virtuous cycle, helps tweak the process which in turn produces more data. This is improving many of the issues that plague our industries and economies today. Palantir solves problems. Period. Which is why I have such high conviction of the company.

The next was for me to analyze what kind of contracts does Palantir have and how they may inform of its operations. Figure depicts the Network graph of Palantir contracts. 

A network representation of Palantir and its businesses (click on the image to zoom)

As discussed before, the graphs has nodes and lines connecting the nodes, called edges. A node is a tangible concept and the edges depict relationships between them. These graphs are a mathematical model of relationships. Mathematical algorithms calculate the specific position of the nodes. This calculation dependent on relationships between the nodes. The network is thus unsupervised.  This means, I did not choose the position of the nodes. The data (relationship between the nodes) lead to placement of the nodes.

Comments:

1) Palantir has built a healthy dossier of multi-year contracts since their IPO

2) The areas are diverse and this indicates the versatility of the products. Operational analytics, data security disease surveillance which have usual clients such as governments.

3) Palantir is expanding into some surprising sectors. These include Electric grid safety, Aviation safety, Legal digital services, geo-spatial intelligence, media/journalism, automotive tech, oil and energy, and nuclear security!

4)  Their footprint is in in several countries including UK, Japan, and Greece. This includes contracts with both the governments and private sector.

5) They are working with government of USA with many agencies such as Food and drug administration (FDA), Centers for Disease Control (CDC) and US Coast guard (USCG). Additionally, US Army, National Nuclear Security Administration (NNSA), National Central for advancing translational sciences (NCATS), US air force (USAF), US space force (USSF), US special Ops Command (USSOCOM) and Program executive office for enterprise information systems (PEO EIS) also have contracts with them. They are also working with government of UK – National Health Service (NHS), Crown Commercial Service, Royal Navy. There is also a contract with Govt. of Greece.

6) I detect a pattern, where if one agency is working with them, another agency from a different country or a sister agency in the same country will then seek a contract with them. This is classical example of multiple growth from shared opportunities and land and expand.

7) For the unique single contracts (Aviation safety, Legal digital services etc), I expect, Other companies or entities in same industry will seek the expertise of Palantir. For example, It is possible that the Civil Aviation authority of UK may want what FAA is doing with Palantir. Other legal powerhouses would like to have a digital platform, so on and so forth.

8) Finally, the private sector companies are to the bottom and bottom-left where you see the clustering of the violet nodes, these co-localize with industries like energy, oil, legal, automotive, aviation etc. The Military complex and governmental contracts are clustered around top right where they co-locate with COVID efforts and around data security and analytics.

All these reasons confirm my belief that Palantir is a stock for the long hold. I will not be selling a single share for at least 20 years. It will only keep growing. The network above will become bigger as Palantir capture more contracts. It will also grow as it expands in more areas!

Disclosure: If not evident from post above, "I own shares of Palantir" 

Next: Teladoc a video visit with a doctor? think again (A network analysis of its business)

Zoom (ZM) is not just video meeting

Few days ago, I looked into other activities that zoom was involved in and remade that graph using a network model. This one is higher resolution. When people think of Zoom, all they first think is the nodes in the blue shaded circle, however the company is clearly putting all of its resources into innovating and making most of the opportunities they have.

Zoom is working to grow its Total addressable market (TAM)

Zoom Rooms and work spaces is a really cool idea and if you get a chance you should look it up on their website. It essentially is a conference room designed for videoconferencing. The coolest feature in my opinion was hardware that is able to sense the ambient air quality and environment. This has a great implication on health of the employees especially with regards COVID-19 and other respiratory viruses. It monitors number of attendees, humidity, heat, and other advanced metrics and currently 'Neat' is in collaboration with Zoom offering this.

Zoom Webinars is another interesting one, where its a opportunity grab on Microsoft PowerPoint hegemony on the presentation market. The focus in webinars is on speaker and content rather that content alone.

Finally, Zoom Events - this could be a solid win for zoom. This almost has a platform like quality in and of itself, since one could plan an event or a conference, build hubs in an event, manage tickets, registration. Advantage is all the data that is collected is amenable to use to make the next event better. This is not a beta product, as I suspect, this is what Zoom is doing with Zoomtopia!! if they can do it, so can you!

Zoom Phone is neat and there is plenty of information out there on this. 

This might be another opportunity to tie in the question whether the market has disconnected the stock price with the fundamentals of the company. The figure below are my thoughts on the matter.

 

Anyways this was a brief report on Zoom (ZM), I am still working on my largest holding and most exciting stock Palantir (PLTR)

Upstart (UPST) and its financial ecosystem

 

Network of Upstart Financial connections (Click on image for larger version)

I received several messages on how to read these graphs. This is due to the  relative unfamiliarity with this type of representation. These  graphs are a visualization tool. They are exceptionally useful to visualize the data and the  corresponding connections.

They comprise of a node which is a variable that is connected to  another variable (node) by a line (called edge). The edge connects 2 related nodes. With this basic information on hand, let’s review the financial ecosystem for Upstart.   

How was this information collected?: This information was collated from news sources, bank websites and search engines. Each of those node connections has been verified and is an existing relationship with Upstart as of 9-3-2021. Additional information was provided by a twitter user by handle @BeaverDamCap.

Upstart has made excellent foray into personal lending space. The number of banks that offer personal loans is about 25 as reported by them, I was able to verify about 13 (11+2) of them here (11 of these these are shown here as green nodes and specific personal loans, other 2 are car loans and microloans respectively). These banks are reported below with approximate assets under management (AUM) in parenthesis.

1.    TCF National Bank [49B]
2.    Telhio Credit Union [0.8B]
3.    Patelco Credit Union [8B]
4.    Kemba Financial [1.5B]
5.    Customers Bank [18B]
6.    Associated Bank [34B]
7.    First Financial Bank [16B]
8.    Ridgewood Savings Bank [6B]
9.    First Federal Bank Of Kansas City [0.8B]
10.    First National Bank Of Omaha [25B]
11.    Drummond Community Bank [0.8B]

USAA may be another one that may be in the process of working with Upstart.

Upstart also purchased Prodigy software, an automotive retail software which gives them an edge into the car loans space. As you may already be aware, Upstart is looking into car loans after its successful foray into personal lending.  This is shown on the graph as purple nodes and with just one bank at the present, hopefully should be an area of growth. At present only Midwest Bank [AUM: 2B] was associated with this aspect of upstart. I would keep an eye out for expansion in this space along with additional banks in personal lending space.

Upstart has partnered with NXT soft for their Artificial intelligence/machine learning modeling and this aspect has been attractive to some bank partners as well. Oriental Bank [AUM: 10B] is current associated with this. Upstart also does microloans with partnership with Accion Chicago for small and struggling businesses.

Upstream and on execution side, upstart has partnered with Credit Karma (owned by Intuit) – sea green nodes for loan aggregation and loan request origination. Finally on execution side, Upstart does its business with bank partners like Finwise Bank and Cross river bank (yellow nodes). Interestingly, Cross river bank, is highly fintech inclined since it also has partnerships with Affirm and Rocket Loans which gives it an operating advantage since it can navigate the fintech world with relative ease. Finwise bank also has several strategic partnerships with loan processing, funding establishments.

This is the Upstart financial ecosystem v2.0 as of Sept 1, 2021. Almost everyone knows or reports the same few names but as you can see the financial network that upstart has generated is bigger that one might assume.

I see massive increase in growth and increase in TAM for Upstart! I have also looked into the impact of the Upstart AI on lending practices and can be found here

Up next and exciting one coming up – the contract nexus of Palantir (PLTR)