| Ticker | Company | ±% | Price | Invest | ||
|---|---|---|---|---|---|---|
| IRTC | iRhythm Technologies | 0.12% | $73.99 | Buy stock | ||
iRhythm Technologies Inc. (NASDAQ: IRTC), a digital health care company based out of San Francisco, California, focuses on the area of cardiac care. The company recently announced reimbursement rate changes not received well by the market. As of publishing, iRhythm went down over 35% as a result of this negative news.
Looking to buy the dip in iRhythm Technologies, Inc. (NASDAQ: IRTC)? Keep reading to learn more about accessing the stock market and taking advantage of these financial instruments.
How to Buy iRhythm (IRTC) Stock
iRhythm (NASDAQ: IRTC) had seen impressive growth throughout 2020 but these gains became sharply wiped out this week. After a rate change announcement by Novatis (a leading medicare processor), iRhythm has been forced to suspend providing its Zio XT service to this segment. As a result, the stock has gone from its all-time high on January 27 of over $285 to a current price of around $82 per share.
However, many investors may become intrigued by a nearly 40% decline in price in just 1 day. At the same time, artificial intelligence will always intrigue individual investors. Define your risk if you considered buying the dip. It's always extremely risky to try to catch the falling knife, so set your stop losses after you buy shares.
Step-by-Step Guide:
- Pick a brokerage.
The first thing you must do before you can buy shares of any stock: Pick a brokerage. Almost all retail brokerages have done away with commissions for trades, so you likely won’t have to pay extra each time you make a buy or sell.
You can choose from an almost limitless number of brokerages. To get started narrowing down your list, define your investing goals. If you've never traded before, consider picking a brokerage that allows you to paper trade.
Finally, keep your eyes peeled for any promotional offers by the various brokerages. If you take advantage of these, you may wind up with free money or even free stocks! - Decide how many shares you want.
Once you’ve opened up your own brokerage account, you need to decide how many shares of iRhythm you want to buy. To settle on an amount, you should consider factors such as your account balance and your investing time horizon.
Keep in mind that stocks can decrease in value at any time. You need to have a max-loss amount in your head before deciding how many shares to buy. Once you decide on an amount, start looking for a favorable entry into the stock. - Choose your order type.
Now that you have decided how many shares of iRhythm to buy, you need to choose which order type to use. You can choose from many order types for different trading scenarios.
If you use a market order, your broker will fill your order immediately at the National Best Bid and Offer (NBBO) price. In contrast, a limit order won’t fill until the stock reaches your predetermined price point.
Following some negative news, iRhythm shares have rapidly declined. While extreme drops can tempt traders, catching the falling knife can also blow up your account. Use a limit order and set a stop-loss order to limit your losses. - Execute your trade.
Once you choose your order type, hit the "buy" button next. Once you do so, your order instructions will transmit to your broker, who will route it through a market maker. Once your order fills, you will see your shares of iRhythm in your brokerage account.
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iRhythm (IRTC) Stock History
iRhythm (NASDAQ: IRTC) had an incredible year in 2020. The company began 2020 with a stock price under $70 per share. Just 1 year later, iRhythm hit its all-time high of $286.19 on January 27. However, the stock has had a rough couple of weeks with the Medicare announcement. iRhythm (NASDAQ: IRTC) has had its share price cut in half to $82.
When technology companies (or private companies in general) go public, they are not always predictable. In 2022, the stock fell back to its apparent median price that’s around $90 per share. However, small fluctuations will likely occur over the course of days or even weeks at a time.
Pros and Cons of iRhythm
Check out the pros and cons of iRhythm before you buy.
Pros:
Though iRhythm has taken a hit, some pros to look for include:
- Rate negotiation: A recent rate announcement by Medicare contractor Novitas seems to have priced iRhythm out of the market. If these rates can negotiate in the future, this could offer a positive catalyst for the company.
- Dip buyers: iRhythm has just seen the worst 2-day stretch in its history. If the stock starts making higher lows, watch for the dip buyers to come out in full force, potentially pushing the stock back toward $100.
Cons:
Similarly, take a look at a couple of cons:
- Further bad news: Novitas' recent announcements mean the company’s stock price has taken a significant hit. While the company can rebound, if more negative financial news comes out, watch out for a further decrease in price.
- Healthcare changes: Another potential con down the road involves changes to healthcare policies. Any significant healthcare changes could have an extremely unpredictable impact on a company such as iRhythm.
Will You Buy the Dip?
iRhythm (NASDAQ: IRTC) has come off its worst 2-day stretch in company history following a negative news headline. While some downside was certainly expected, a stock that cut in half in a week might kill it for certain investors. While catching the falling knife is always risky, this may offer a great opportunity for traders to get into iRhythm (NASDAQ: IRTC) at a discount. Make sure you set stop losses and ensure you use one of the best brokers.