Wedgewood Partners, a St. Louis, Missouri-based investment management firm, released its Q1 2020 Investor letter – a copy of which is available for download here. Wedgewood Partners returned -16.30% for the first quarter. Meanwhile, the benchmark Russell 1000 Growth Index and the S&P 500 Index lost 14.10% and 19.60%, respectively.
In the said letter, Wedgewood Partners highlighted a few stocks and Edwards Lifesciences Corp (NYSE:EW) is one of them. Edwards Lifesciences is a medical technology company based in California. Year-to-date, EW stock lost 6.1% and on April 29th it had a closing price of $218.97. Its market cap is of $45.2 billion. Here is what Wedgewood Partners said:
“Edward Lifesciences reported exceptionally strong results for the final quarter of 2019, with U.S. transcatheter aortic valve replacement (TAVR) revenues accelerating to +40% growth, driven by approval for use in low-risk populations. In addition, Edwards benefited from some share take from its second largest TAVR competitor, Medtronic, which had problems meeting the rapid increase in TAVR demand. However, Edwards stock sold off as investors were disappointed that management maintained conservative growth guidance for 2020 and, subsequently, the spread of COVID-19 began disrupting the normal operation of non-emergency procedures at hospitals and cardiac catheterization labs. We do not think many TAVR or SAVR procedures can be postponed longer than a few weeks or months, as the prognosis for severe aortic stenosis is quite dire, so the revenue risk to Edwards should be mostly related to short-term timing. As such, Edwards’ valuation has become increasingly attractive and we will look to opportunistically add to positions.”
In Q4 2019, the number of bullish hedge fund positions on EW stock increased by about 25% from the previous quarter (see the chart here).
Disclosure: None. This article is originally published at Insider Monkey.