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Should Investors Buy the Dip in EXACT Sciences (EXAS) Stock?

Artisan Mid Cap Fund recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of -11.55% for the quarter (investor class), outperforming their benchmark, the Russell Midcap Index which returned -27.07% in the same quarter. You should check out Artisan Mid Cap Fund’s top 5 stock picks which helped them beat the market by nearly 16 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.

In the said letter, Artisan Mid Cap Fund highlighted a few stocks and Exact Sciences Corp (NASDAQ:EXAS) is one of them. Exact Sciences is a molecular diagnostics company. Year-to-date, EXAS stock lost 12.4% and on May 8th it had a closing price of $82.01. Its market cap is of $12.13 billion. Here is what Artisan Mid Cap Fund said:

“Exact Sciences has experienced weakened demand for its Cologuard colon cancer screenings as routine visits to physicians’ offices have decreased dramatically under social distancing restrictions. While Exact Sciences is taking steps to deploy an at-home screening option to help offset some of the lost sales, we believe the company will experience meaningful declines in its nearterm revenues. That said, the longer-term market opportunity remains intact for Cologuard’s less invasive and highly effective colon cancer screenings—which find colon cancer at a 92% success rate. We are remaining patient given the company’s solid balance sheet and our belief demand for colon cancer screenings will likely rebound naturally as people are able to resume visits to their primary care providers.”

In Q4 2019, the number of bullish hedge fund positions on EXAS stock increased by about 5% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with EXAS’s growth potential.

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

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