Is Natera (NTRA) a Smart Long-term Buy?

Alger Small Cap Focus Fund recently released its Q3 2020 Investor Letter, a copy of which you can download here. Class A shares of the Alger Small Cap Focus Fund underperformed the Russell 2000 Growth Index during the third quarter of 2020. You should check out Alger Small Cap Focus Fund’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Alger Small Cap Focus Fund highlighted a few stocks and Natera Inc. (NASDAQ:NTRA) is one of them. Natera Inc. (NASDAQ:NTRA) is a genetic testing company that operates a CLIA-certified laboratory. Year-to-date, Natera Inc. (NASDAQ:NTRA) stock gained 215.4% and on December 28th it had a closing price of $106.26. Here is what Alger Small Cap Focus Fund said:

“Natera is a leading provider of genetic diagnostic tests used in the large, under-penetrated reproductive medicine. oncology and organ transplant markets. Natera’s disruptive technology is augmented by software algorithms, bioinformatics and artificial intelligence to improve the detection of diseases and deliver clinically actionable information, thereby addressing significant unmet medical needs and saving lives. Natera is a highly innovative company that consistently invests 20% of its revenue in research and development. Natera stock outperformed in the third quarter after the company reported stronger-than¬expected results for the three-month period ended June 30. In addition, the two leading reproductive medicine societies, the American College of Obstetricians and Gynecologists and the Society for Maternal Fetal Medicine, issued a joint opinion that recommends non-invasive prenatal testing for all pregnancies (versus only for high-risk pregnancies, which are 20% of total pregnancies). Natera also received final Medicare coverage for itsSignatera molecular residual test for patients with stage II or stage III colorectal cancer. Natera believes the colorectal cancer market for Signatera could involve a million tests annually. Finally, on September 24, Medicare issued a draft local coverage determination for the use of the Signatera MRD test for immunotherapy response monitoring, an important step toward opening a market that could potentially involve 800,000 tests a year market.”

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In Q3 2020, the number of bullish hedge fund positions on Natera Inc. (NASDAQ:NTRA) stock increased by about 23% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Natera’s growth potential. Our calculations showed that Natera Inc. (NASDAQ:NTRA) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 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. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.