Should You Be Tempted To ‘Sell’ Emergent Biosolutions (EBS) Stock?

Baron Discovery Fund recently published its second-quarter commentary – a copy of which can be downloaded here. During the second quarter of 2021, the Baron Discovery Fund returned 6.07% (institutional shares). In comparison, the benchmark S&P 500 Index was up 8.55%, while the Russell 2000 Growth Index was up 3.92%. You should check out Baron Discovery Fund’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q2 2021 Investor Letter, the fund highlighted a few stocks and Emergent Biosolutions Inc. (NYSE:EBS) is one of them. Emergent Biosolutions Inc. (NYSE:EBS) is a multinational specialty biopharmaceutical company. In the last three months, Emergent Biosolutions Inc. (NYSE:EBS) stock lost 7%. Here is what the fund said:

“We sold our remaining position in Emergent BioSolutions Inc., a specialty biomanufacturer and service provider for commercial and government customers. Our original investment thesis was that since Emergent has for years been a trusted provider of vaccines for the government for biological agents (including small pox and anthrax), that it should be able to transition naturally to servicing commercial clients in the vaccine space. This played out well at the outset, as Emergent’s manufacturing segment won contracts from many customers, including some of the larger COVID vaccine manufacturers. However, the company stumbled dramatically in the delivery of COVID vaccine products to an extent that surprised us. For now, we have decided to wait for evidence of operational improvement.”

In December 2020, we shared Baron Discovery Fund EBS’s thesis in this article.

In Q3 2020, the number of bullish hedge fund positions on Emergent Biosolutions Inc. (NYSE:EBS) stock increased by about 5% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in EBS’s growth potential. Our calculations showed that Emergent Biosolutions Inc. (NYSE:EBS) 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.

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