Is Exact Sciences Corp. (EXAS) A Smart Long-Term Buy?

Artisan Partners Limited Partnership, a high value-added investment management firm, published its ‘Artisan Mid Cap Fund’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 16.82% was recorded by its Investor Class: ARTMX, 16.87% by its Advisor Class: APDMX, and 16.89% by its Institutional Class: APHMX, in the fourth quarter of 2020, all below its Russell Midcap Growth Benchmark that delivered a 19.02% return and its Russel Midcap Index that was up by 19.91% in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Artisan Mid Cap Fund, in their Q4 2020 investor letter, mentioned Exact Sciences Corporation (NASDAQ: EXAS) and emphasized their views on the company. Exact Sciences Corporation is a Wisconsin-based molecular diagnostics company that currently has a $21.7 billion market capitalization. Since the beginning of the year, EXAS delivered a -3.01% return, but its 12-month gains are decently up by 239.05%. As of March 17, 2021, the stock closed at $128.50 per share.

Here is what Artisan Mid Cap Fund has to say about Exact Sciences Corporation in their Q4 2020 investor letter:

“We have owned shares of Exact Sciences for several years given our belief Cologuard, a non-invasive and highly effective alternative to colonoscopies, can be a blockbuster diagnostic test for detecting early stage colon cancer. That said, the pandemic has delayed a sizable number of routine physicians’ office visits and consequently colon cancer screenings. We believe this headwind will prove transitory. As the vaccine is rolled out and the broader economy returns to normal, Exact Sciences is well-positioned to address this large backlog of screenings. We are also optimistic about a few recent developments in the quarter which could boost the longer-term profit cycle potential for the company. The United States Preventive Services Task Force lowered its colorectal cancer screening guidelines (from 50 to 45 years old) in October, which we believe expands the addressable market for Cologuard. Additionally, the company announced it is acquiring Thrive, a leader in early, blood-based multi-cancer detection screening. We believe Thrive will accelerate Exact’s efforts to detect a wide range of early stage cancers and will be a very important tool for reducing cancer deaths. While it will take several years to refine and study the tests and eventually obtain FDA approval, we believe Exact Science’s large sales force is well-positioned to efficiently commercialize these tests.”

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Our calculations show that Exact Sciences Corporation (NASDAQ: EXAS) 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, Exact Sciences Corporation was in 40 hedge fund portfolios, compared to 34 funds in the third quarter. EXAS delivered a 0.92% 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.