Is Vapotherm (VAPO) a Smart Long-term Buy?

Alger Mid Cap Focus Fund recently released its Q3 2020 Investor Letter, a copy of which you can download here. Class Z shares of the Alger Mid Cap Focus Fund outperformed the Russell Midcap Growth Index during the third quarter of 2020. You should check out Alger Mid 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 Mid Cap Focus Fund highlighted a few stocks and Vapotherm Inc (NYSE:VAPO) is one of them. Vapotherm Inc (NYSE:VAPO) is a medical device company. Year-to-date, Vapotherm Inc (NYSE:VAPO) stock gained 126.9% and on December 28th it had a closing price of $27.59. Here is what Alger Mid Cap Focus Fund said:

“Vapotherm’sdevices treat patients suffering from respiratory distress. The company’s Iii-VNI Technology delivers non-invasive, mask-free ventilatory support by providing heated. humidified air at high velocity to patients through a comfortable nasal interface. Vapotherm’s technology came into focus during Covid-19: early in the pandemic, Covid-19 patients in respiratory distress were frequently treated with invasive ventilation (intubating patients and putting them on a ventilators), but over time it became increasingly evident that ventilator use can raise mortality rates among Covid-19 patients.

As such, clinicians pivoted to other respiratory therapies, including Vapotherm. However, shares of Vapotherm underperformed after the company’s second quarter earnings report fell short of expectations. Investors’ earnings expectations were far too high because Vapotherm had disclosed it was increasing production capacity to over 20 times pre-pandemic levels. Some investors anticipated a similar increase in sales. though Vapotherm eventually clarified that production would only increase if demand grew. Also, utilization of machines acquired by hospitals during Covied-19 fell short of expectations. We believe Vapotherm has strong longer-term growth potential, but it will take time to educate clinicians about the benefits of Hi¬VNI Technology over traditional treatments for respiratory distress.”

In Q3 2020, the number of bullish hedge fund positions on Vapotherm Inc (NYSE:VAPO) stock remained unchanged from the previous quarter (see the chart here). Our calculations showed that Vapotherm Inc (NYSE:VAPO) 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.