Artisan Partners, a high value-added investment management firm, published its ‘Artisan Small Cap Fund’ fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of -6.99% was recorded by its Investor Class: ARTSX, -6.93% by its Advisor Class: APDSX, and -6.93% by its Institutional Class: APHSX for the fourth quarter of 2021, all below the Russell 2000® Growth Index that delivered a 0.01% return and the Russell 2000® Index that was up by 2.14% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Artisan Small Cap Fund, in its Q4 2021 investor letter, mentioned NeoGenomics, Inc. (NASDAQ: NEO) and discussed its stance on the firm. NeoGenomics, Inc. is a Fort Myers, Florida-based testing laboratories company with a $2.2 billion market capitalization. NEO delivered a -45.72% return since the beginning of the year, while its 12-month returns are down by -65.92%. The stock closed at $18.52 per share on February 23, 2022.
Here is what Artisan Small Cap Fund has to say about NeoGenomics, Inc. in its Q4 2021 investor letter:
“NeoGenomics (NEO) is the largest specialty oncology lab (~1 million tests in 2020) with a growing testing menu (>620 tests) and the broadest distribution into community providers (>4,400 hospitals and clinics), where 80% of US cancer patients are treated. Access to physicians and patients position NEO as an important partner to biopharmaceutical companies in drug discovery as data on patients/treatments creates significant optionality for NEO’s informatics division. In addition to general share weakness among small-cap health care stocks, shares have been under pressures alongside a late summer/early fall surge in COVID-19 reducing the company’s patient volumes, delaying clinical trials and lowering sales reps’ access to physician offices. A recent internal investigation also found some of the company’s consulting contracts are not in compliance with federal health care laws and regulations. The portion of contracts in question is immaterial (<1%); the issue was selfreported and will not lead to restatement or impact future guidance.
Looking ahead, we are optimistic the company’s growth profile could inflect upwards. Population aging, higher cancer incidence and the advent of personalized medicine (for which patients must be tested for cancer markers, sometimes multiple times) drive strong low double digit volume growth, and this should normalize as COVID-19 subsides. The increasing revenue mix from fast growing pharma services and informatics plus next-generation sequencing should be enhanced by the mid-2022 launch of RaDaR, NEO’s minimal residual disease assay (MRD). The market for testing MRD is ~$15 billion and significantly increases its total addressable market and top-line growth rate—from low double digits to mid-teens (or more) over the next four years. For all those reasons, we are staying the course with this core CropSM holding.”
Photo by National Cancer Institute on Unsplash
Our calculations show that NeoGenomics, Inc. (NASDAQ: NEO) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. NEO was in 13 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 16 funds in the previous quarter. NeoGenomics, Inc. (NASDAQ: NEO) delivered a -50.78% return in the past 3 months.
In November 2021, we also shared Artisan Partners’ Q3 2021 views on NEO in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
