Ariel Investments: ‘Envista (NVST) Still Sells at A Discount’

Ariel Investments, an investment management firm, published its fourth-quarter 2020 ‘Ariel Fund’, ‘Ariel Appreciation Fund’, ‘Ariel Focus Fund’, ‘Ariel International Fund’, and ‘Ariel Global Fund’ Investor Letter – a copy of which can be downloaded here. In the fourth quarter of 2020, a return of 31.56% was recorded by Ariel fund, 23.57% by Ariel Appreciation Fund, 21.62% by Ariel Focus Fund, 8.26% by Ariel International Fund, and 9.80% return by Ariel Global Fund. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Ariel Investments, in their Q4 2020 investor letter, emphasized their Envista Holdings Corporation (NYSE: NVST) position. Envista Holdings Corporation is a California-based company that offers dental products including dental implant, orthodontics, and digital imaging technologies. It currently has a $6.2 billion market capitalization. Since the beginning of the year, NVST is up 14.05%, decently extending its 12-month gains to 91.11%. As of March 8, 2021, the stock closed at $38.47 per share.

Here is what Ariel Investments has to say about Envista Holdings Corporation in their Q4 2020 investor letter:

“From the moment we initiated our position, Envista has been a portfolio favorite. The genesis of this name is the result of excellent, original work by our healthcare analyst, Sabrina Carollo. Previously, we owned Sybron Dental when it was acquired by Danaher, which gave us insight into the industry. While many were concerned about the understandable falloff in dentist visits during the pandemic, we acknowledged the near-term earnings challenges but concluded this industry leader would quickly recover given pent-up demand. Envista serves over one million dentists in over 150 countries, with products that cover
approximately 90% of a dentist’s needs. As people keep their teeth longer and become increasingly concerned about their appearance, more money will be spent on cosmetic dentistry. Not to mention, the industry’s significant regulatory hurdles create hefty barriers to entry. Envista wisely donates products to dental schools and offers continuing education so that dentists become captive customers who are less apt to switch providers. We were accumulating Envista shares as low as $11.16 on March 19th. It closed out the year at $33.73. While its return off the low is significant, the company still sells at a discount to our estimate of its private market value.”

George Rudy/

Our calculations show that Envista Holdings Corporation (NYSE: NVST) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Envista Holdings Corporation was in 33 hedge fund portfolios compared to 20 funds in the third quarter. NVST delivered a 21.47% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.