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 iRhythm Technologies, Inc. (NASDAQ: IRTC) and emphasized their views on the company. iRhythm Technologies, Inc. is a California-based digital healthcare company that currently has a $3.97 billion market capitalization. Since the beginning of the year, IRTC delivered a -42.61% return, but its 12-month gains are still up by 96.29%. As of March 17, 2021, the stock closed at $134.22 per share.
Here is what Artisan Small Cap Fund has to say about iRhythm Technologies, Inc. in their Q4 2020 investor letter:
“Among our bottom contributors in Q4 was iRhythm. iRhythm Technologies develops and markets the Zio, a small patch for monitoring suspected heartbeat arrhythmias. The Zio is a significant improvement over the current standard of care, the Holter monitor which is typically found to be less effective, more cumbersome and uncomfortable. The Zio utilizes a proprietary algorithm, based on machine learning, capable of detecting 12 classes of arrhythmias from a database of over 2 million patients (over 600 million hours of monitoring). That said, one point of recent controversy has been the price Medicare will pay for Zio, as artificial intelligence interpretation of medical test results is a new, unproven area of health care reimbursement. The company received good news on this front midyear, as Medicare’s proposed 2021 funding level was significantly increased. However, funding in the approved legislation was ultimately not increased, causing a sharp selloff in the stock. We saw this as an opportunity to add to our position as our valuation assumes current prices for Zio persist and any future Medicare reimbursement increases (which are still possible) as upside to our future earnings estimates. Furthermore, we believe the longer-term growth runway ahead is meaningful as this $2 billion market converts to patch sensors over time.”
Our calculations show that iRhythm Technologies, Inc. (NASDAQ: IRTC) 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, iRhythm Technologies, Inc. was in 19 hedge fund portfolios, compared to 26 funds in the third quarter. IRTC delivered a -43.39% 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.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:
Disclosure: None. This article is originally published at Insider Monkey.