Is Inovalon Holdings Inc. (INOV) A Smart Long-Term Buy?

Bernzott Capital Advisors, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A net return of 10.27% was recorded by the fund for the Q1 of 2021, below the Russell 2000 Value and Russell 2500 Value Index that delivered a 21.17% and 16.83% returns respectively for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Bernzott Capital Advisors, in their Q1 2021 investor letter, mentioned Inovalon Holdings, Inc. (NASDAQ: INOV), and shared their insights on the company. Inovalon Holdings, Inc. is a Bowie, Maryland-based technology company that currently has a $4.8 billion market capitalization. Since the beginning of the year, INOV delivered a 69.51% return, extending its 12-month gains to 88.96%. As of May 05, 2021, the stock closed at $30.80 per share.

Here is what Bernzott Capital Advisors has to say about Inovalon Holdings, Inc. in their Q1 2021 investor letter:

“Inovalon Holdings (INOV): After being a top detractor in the fourth quarter, the healthcare cloud software provider rebounded in the first quarter following a strong earnings release and outlook. Sales momentum continues to accelerate with annual contract value rising 27%, with strength across all lines of business including life sciences, payers, retailers, and providers, indicating that demand for INOV’s solutions remain robust. While COVID served as a headwind during 2020, this likely will turn into a tailwind in 2021 supported by easy comparisons and improving patient visitations. Many elements of our investment thesis remain intact, including rising recurring revenue and good profitability metrics.”

Our calculations show that Inovalon Holdings, Inc. (NASDAQ: INOV) 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, Inovalon Holdings, Inc. was in 22 hedge fund portfolios, compared to 20 funds in the third quarter. INOV delivered a 19.57% 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.