Alger, an investment management firm, published its ‘Alger Small Cap Focus Fund’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. In the letter, the fund highlighted their largest portfolio sector weightings, which is in the Health Care and Information Technology sector, and their comments on notable companies. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Alger Small Cap Focus Fund, in their Q4 2020 investor letter, mentioned Natera, Inc. (NASDAQ: NTRA) and emphasized their views on the company. Natera, Inc. is a California-based clinical genetic testing company that currently has an $8.9 billion market capitalization. Since the beginning of the year, NTRA delivered a 3.81% return, impressively extending its 12-month gains to 235.44%. As of March 11, 2021, the stock closed at $103.98 per share.
Here is what Alger Small Cap Focus Fund has to say about Natera, Inc. in their Q4 2020 investor letter:
“Natera is a leading provider of genetic diagnostics tests used in the large, underpenetrated reproductive medicine, oncology and organ transplant markets. Natera’s disruptive technology is augmented with software algorithms, bioinformatics and artificial intelligence to improve the detection of diseases and deliver clinically actionable information, thereby addressing significant unmet medical needs and ultimately saving lives. Natera is a highly innovative company that has consistently invested 20% of its revenue in research and development. Natera stock outperformed in the fourth quarter after the company reported stronger-than-expected financial results for the three-month period ended September 30, driven by strong test volume. After the two leading reproductive medicine societies in the U.S. issued a positive joint opinion that recommends non-invasive prenatal testing (NIPT) for all pregnancies in August. UnitedHealthcare and Aetna, who were the two large national payors that did not provide reimbursement for the service, finally adopted formal coverage of NIPT. This development increases Natera’s potential for generating both strong test volume growth and a higher average price per NIPT. In October, Natera introduced testing for colorectal cancer, which is the first monitoring test launched in the U.S. to detect minimal residual disease (MRD) or cancer recurrence in solid tumors. Natera is also working to obtain final Medicare coverage and reimbursement for at least one additional application of its Signatera test involving the results of various immunotherapy drugs for cancer treatment.”
Our calculations show that Natera, Inc. (NASDAQ: NTRA) 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, Natera, Inc. was in 20 hedge fund portfolios, compared to 25 funds in the third quarter. NTRA delivered a -3.37% 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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