Is IDEXX Lab. (IDXX) A Smart Long-Term Buy?

Baron Funds, an investment management firm, published its fourth quarter 2020 “Baron Asset Fund” investor letter – a copy of which can be downloaded here. A return of 15.14% was recorded by its Retail Shares, and 15.21% by its Institutional Shares in the fourth quarter of 2020, both below its Russell Midcap Growth Benchmark that delivered a 19.02% return but above its S&P 500 index that was up by 12.15% in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Baron Funds, in their Q4 2020 investor letter, mentioned IDEXX Laboratories, Inc. (NASDAQ: IDXX) and emphasized their views on the company. IDEXX Laboratories, Inc. is a Westbrook, Maine-based multinational corporation that currently has a $41.98 billion market capitalization. Since the beginning of the year, IDEXX delivered a -1.70% return, but its 12-month gains are up by 168.60%. As of March 22, 2021, the stock closed at $491.37 per share.

Here is what Baron Funds has to say about IDEXX Laboratories, Inc. in their Q4 2020 investor letter:

“IDEXX Laboratories, Inc., a veterinary diagnostic company, was the largest contributor to performance for the third consecutive quarter. The stock gained after the company again reported excellent quarterly results that exceeded expectations, despite the headwinds caused by the pandemic. Recurring revenue growth in IDEXX’s core companion animals group improved to 21% and consolidated operating margins expanded nearly 500 basis points. Competitive trends remain outstanding, and there continue to be indications that COVID-related testing will further accelerate growth in veterinary diagnostics. We believe these results continued to demonstrate that IDEXX is a unique, competitively advantaged business that is likely to outperform across economic cycles.”


Our calculations show that IDEXX Laboratories, Inc. (NASDAQ: IDXX) 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, IDEXX Laboratories, Inc. was in 46 hedge fund portfolios, compared to 41 funds in the third quarter. IDXX delivered a 0.35% return in the past 3 months.