The world as we know it has gotten bigger, literally much bigger, and the fight against obesity and the sometimes resulting diabetes has turned into a full-fledged war. From years of high-calorie fast-food and sugary sodas to a society that stays inside glued to video games instead of exercising, people in America and around the world are gaining weight. A new report from Cowen points out that the diabetes device market is valued at $9 billion to $10 billion, and some companies will exploit that market to the max.

The Cowen team points out that an estimated 300 million people have diabetes globally, and that number is expected to skyrocket to an astounding 500 million by 2035. With this incredible jump, the demand for insulin pumps and glucose measurement is going take a commensurate move higher.

Cowen initiates three stocks rated Outperform that stand to benefit from the current and impending diabetes epidemic.

DexCom Inc. (NASDAQ: DXCM) is developing and marketing continuous glucose monitoring systems for ambulatory use by patients and by health care providers in the hospital. The Cowen analysts think the stock can be a core growth medical holding for years to come, as the company looks poised to increase market share, while sporting a highly leveragable financial model. With impressive third-quarter 2014 results indicating double-digit top-line growth, a string of U.S. Food and Drug Administration (FDA) approvals for its new products over the past few months, along with a robust product pipeline, contribute to the growth trajectory of this company and good momentum for 2015, as well.

The Cowen price target for the stock is started at $65. The Thomson/First Call consensus price target is $52.96. Shares closed above that figure Monday at $56.06.

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Insulet Corp. (NASDAQ: PODD) is the leader in tubeless insulin pump technology with its OmniPod Insulin Management System. Insulet seeks to expand the use of insulin pump therapy among people with insulin-dependent diabetes. The OmniPod is a revolutionary and easy-to-use tubeless insulin pump that features just two parts and a fully automated cannula insertion. Insulet’s subsidiary, Neighborhood Diabetes, is a leading distributor of diabetes products and supplies, delivered through a high-touch customer service model. The Cowen team notes the OmniPod revenue continues to grow at 20%, which suggest a current market share of 10% to 15%, and the company is winning 25% of new patients.

The Cowen price target is set at $53, and the consensus target is $45.79. Insulet shares closed trading on Monday at $46.22.

Tandem Diabetes Care Inc. (NASDAQ: TNDM) is a medical device company with an innovative, user-centric and integrated approach to the design, development and commercialization of products for people with insulin-dependent diabetes. It manufactures and sells the t:slim Insulin Pump, the slimmest and smallest durable insulin pump currently on the market, and the first and only insulin pump with a high-resolution, color touch screen. The Cowen team applauds the job the company did in quickly gaining 3% to 4% of the insulin pump market with the launch of t:slim back in 2012, and they think it can have 10% share by 2017.

The Cowen price target is $16, and the consensus target is higher at $19.44. The stock closed on Monday at $12.80 a share.

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The sad, but true facts of the diabetes epidemic present long-term aggressive investors with an outstanding opportunity. The reported cases and patient population that needs treatment will only get larger, and investing in the medical device product leaders could bring solid gains in the future.

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