Baron Health Care Fund recently published its fourth-quarter commentary – a copy of which can be downloaded here. During the fourth quarter of 2020, the Baron Health Care Fund returned 17.1% (institutional shares). In comparison, the benchmark S&P 500 Index was up 12.15%, while the Russell 3000 Health Care Index was up 10.08%. You should check out Baron’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q4 2020 Investor Letter, Baron Health Care Fund highlighted a few stocks and Thermo Fisher Scientific Inc. (NYSE:TMO) is one of them. Thermo Fisher Scientific Inc. (NYSE:TMO) is an analytical laboratory instrument manufacturing company. In the last three months, Thermo Fisher Scientific Inc. (NYSE:TMO) stock gained 4.0% and on February 22nd it had a closing price of $463.28. Here is what Baron Health Care Fund said:
“We added to Thermo Fisher Scientific Inc., the leading global life sciences tools provider. Thermo is a “picks and shovels” company which offers a broad array of products and services (such as instruments, reagents, consumables, and manufacturing and other services) to pharmaceutical and biotechnology companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies, as well as environmental, industrial quality and process control settings. Thermo has benefited from sales of products and services related to COVID-19, such as diagnostic testing, personal protective equipment and pharmaceutical services, which we think demonstrates the company’s broad capabilities and critical role in the life sciences industry. Although some of this revenue will taper off as the pandemic subsides, we think Thermo will continue to benefit from longterm secular tailwinds, including increased investments in life sciences, diagnostics, vaccine/therapeutics and health care broadly. We think Thermo should be able to generate at least mid-to-high single-digit annual organic revenue growth well into the future driven by positive end-market trends and market share gains. We also expect Thermo to continue to use its strong free cash flow and balance sheet to create shareholder value through M&A and share repurchases.”
Earlier this month, we published an article revealing that Thermo Fisher Scientific Inc. (NYSE:TMO) had an amazing fourth quarter. Thermo Fisher’s adjusted profit climbed 100 percent on a year-over-year basis to $7.09 per share, easily beating the consensus forecast of $6.56 per share.
In Q3 2020, the number of bullish hedge fund positions on Thermo Fisher Scientific Inc. (NYSE:TMO) stock increased by about 10% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in TMO’s growth potential. Our calculations showed that Thermo Fisher Scientific Inc. (NYSE:TMO) isn’t ranked among the 30 most popular stocks among hedge funds.
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.