Artisan Partners Limited Partnership, a high value-added investment management firm, published its ‘Artisan Small Cap Fund’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 27.07% was recorded by its Investor Class: ARTSX, 27.14% by its Advisor Class: APDSX, and 27.15% by its Institutional Class: APHSX, in the fourth quarter of 2020, all below its Russell 2000 Growth Benchmark that delivered a 29.61% return and its Russel 2000 Index that was up by 31.37% in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Artisan Small Cap Fund, in their Q4 2020 investor letter, mentioned Veracyte, Inc. (NASDAQ: VCYT) and emphasized their views on the company. Veracyte, Inc. is a California-based genomic diagnostics company that currently has a $3.3 billion market capitalization. Since the beginning of the year, VCYT delivered a 1.98% return, impressively extending its 12-month gains to 162.41%. As of March 17, 2021, the stock closed at $53.92 per share.
Here is what Artisan Small Cap Fund has to say about Veracyte, Inc. in their Q4 2020 investor letter:
“Among our top Q4 individual contributors was Veracyte. Veracyte specializes in the improvement of diagnostic accuracy utilizing a combination of RNA sequencing, machine learning and the company’s proprietary “field of injury” technology. Field of injury technology can be applied to diagnosing lung cancer, testing cells in the main airway (since it suffers damage from smoking) instead of requiring a procedure to take a direct sample of the potentially cancerous nodule in the lungs. The company has approval, clinical data and reimbursement for four tests—a big hurdle for a diagnostics company—for thyroid cancer, breast cancer, lung cancer and idiopathic pulmonary fibrosis (a form of lung disease). These diagnostics reduce the number of surgeries performed for patients who have indeterminate test results, saving the health care system unnecessary overtreatment costs. All four tests are expected to launch in 2021, and three of the four received positive news on the reimbursement front, which we believe will help accelerate volumes and revenues for the company. Given the pipeline of diagnostics and a nasal swab for early detection of lung cancer in the pipeline, we believe the company is well-positioned for a meaningful profit cycle ahead.”
Our calculations show that Veracyte, Inc. (NASDAQ: VCYT) 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, Veracyte, Inc. was in 15 hedge fund portfolios, compared to 12 funds in the third quarter. VCYT delivered a 4.31% 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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