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BioSpecifics Technologies (BSTC) Has Risen 3% in Last One Year, Underperforms Market

Alex Smith
·4 min read

If you are looking for the best ideas for your portfolio you may want to consider some of Summers Value Partners top stock picks. Summers Value Partners, an investment management firm, is bullish on BioSpecifics Technologies Corp (NASDAQ:BSTC) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on BioSpecifics Technologies Corp (NASDAQ:BSTC) stock. BioSpecifics Technologies Corp (NASDAQ:BSTC) is a biopharmaceutical company that originated and continues to develop collagenase-based therapies.

In July 2019, Summers Value Partners had released its Q2 2019 investor letter. BioSpecifics Technologies Corp (NASDAQ:BSTC) stock has posted a return of 2.5% in the trailing one year period, underperforming fund's benchmark the S&P 500 Index which returned 11.9% in the same period. This suggests that the investment firm was wrong in its decision. On a year-to-date basis, BioSpecifics Technologies Corp (NASDAQ:BSTC) stock has fallen by 1.4%.

Summers Value Partners fund posted a return of 1.2% in the second quarter of 2019, underperforming fund's benchmark the S&P 500 Index which returned 4.30% in the same period. Let’s take a look at comments made by Summers Value Partners about BioSpecifics Technologies Corp (NASDAQ:BSTC) stock in the Q2 2019 investor letter.

"We presented Biospecifics as a best idea at the recent Value x Vail conference held in Vail, Colorado. The presentation can be found here. Our thesis hinges on our belief that the Xiaflex sales potential in cellulite will be bigger-than-expected and that the stock market is currently undervaluing the opportunity. The cellulite indication should be filed in the next few months and, if all goes well, approved in late 2020. The cellulite market is a cash-pay aesthetics market, which could lead to multiple expansion over time if our thesis is correct. We believe the currently approved Xiaflex indications plus cash on the balance sheet are worth $45-50 per share providing downside protection. The biggest risk facing Biospecifics is the going concern risk associated with the company’s commercial partner, Endo Pharmaceuticals (ENDP), which we are monitoring closely. We expect Biospecifics to end 2019 with over $100 million of cash on the balance sheet and zero debt (~$14 per share). The company recently announced a $4 million share buyback program. We believe the company could more aggressively return capital to shareholders and should evaluate an ongoing dividend along with more aggressive share repurchases when market conditions warrant."

Countries With Highest Medical Research Spending
Countries With Highest Medical Research Spending

Pixabay/Public Domain

Last month, we published an article revealing Summers Value Partners bullish investment thesis on BioSpecifics Technologies Corp (NASDAQ:BSTC) stock in its Q2 2020 investor letter. This suggests that the investment firm has been bullish for a long time on BioSpecifics Technologies Corp (NASDAQ:BSTC).

In Q1 2020, the number of bullish hedge fund positions on BioSpecifics Technologies Corp (NASDAQ:BSTC) stock decreased by about 18% from the previous quarter (see the chart here), so a number of other hedge fund managers don't seem to agree with BioSpecifics Technologies' growth potential. Our calculations showed that BioSpecifics Technologies Corp (NASDAQ:BSTC) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 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. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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