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Alger Small Cap Focus: ‘Quidel Corp. (QDEL) is Among Our Top Detractors’

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Jose Karlo Mari Tottoc
·4 min read
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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 Quidel Corporation (NASDAQ: QDEL) and emphasized their views on the company. Quidel Corporation is a California-based diagnostic healthcare products manufacturer that currently has a $5.7 billion market capitalization. Since the beginning of the year, QDEL delivered a -24.19% return, but its 12-month gains are still up by 72.02%. As of March 12, 2021, the stock closed at $136.19 per share.

Here is what Alger Small Cap Focus Fund has to say about Quidel Corporation in their Q4 2020 investor letter:

"Quidel develops, manufactures and markets rapid point-of-care diagnostic solutions worldwide that are used for infectious disease, cardiac and toxicology testing. Quidel's solutions are mainly used at point-of-care locations, such as physicians' offices, hospitals, urgent careclinics, pharmacies, wellness screening clinics and clinical laboratories when quality, highly sensitive, low cost. easy-to-use and fast diagnosis is particularly important. Shares of the company underperformed during the fourth quarter due to general concern that Covid-19 vaccines will result in decreased demand for Quidel's Covid-19 testing products. Potential exists for demand to decrease in 2022, but Covid-19 testing is still experiencing strong utilization while vaccines are being distributed, a process that can last throughout 2021. In addition, we believe the need for testing can potentially last longer than the market is currently assuming. Quidel has a significantly enhanced position in rapid point-of-care infectious disease testing, with a significant number of new instrument customers as a result of the pandemic.

Quidel also has a robust product pipeline outside of Covid-19, including the expected launch of its Savanna instrument by mid2021to offer rapid molecular testing with a panel of up to 8-12 tests at a time from a single patient sample. Additionally, Covid19 testing is allowing Quidel to build a sizable cash position, which it can potentially deploy on accretive mergers and acquisitions."

17 Countries With Universal Health Care in 2017
17 Countries With Universal Health Care in 2017

GagliardiImages/Shutterstock.com

Our calculations show that Quidel Corporation (NASDAQ: QDEL) 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, Quidel Corporation was in 29 hedge fund portfolios, compared to 42 funds in the third quarter. QDEL delivered a -32.77% 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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Disclosure: None. This article is originally published at Insider Monkey.