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Cantel Medical (CMD) Shines in Alger Small Cap’s 2020 Portfolio

·4 min read

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 Cantel Medical Corp. (NYSE: CMD) and emphasized their views on the company. Cantel Medical Corp. is a New Jersey-based medical equipment manufacturing company that currently has a $3.2 billion market capitalization. Since the beginning of the year, CMD delivered a -1.84% return, but its 12-month gains are still up by 78.16%. As of March 11, 2021, the stock closed at $77.29 per share.

Here is what Alger Small Cap Focus Fund has to say about Cantel Medical Corp. in their Q4 2020 investor letter:

"Cantel Medical develops and manufactures infection prevention products and services for the health care market. Cantel provides capital equipment, consumables and services for the endoscopy, dental, dialysis and life sciences markets to help prevent the occurrence or spread of infection on a worldwide basis. Shares of Cantel Medical outperformed during the final three months of 2020 due to the company reporting stronger-than-expected revenue and earnings results for its first quarter fiscal year 2021 ended October 31. After the pandemic caused a delay in procedures for endoscopy and dental procedures earlier this year, a rebound in demand in both segments has exceeded management's expectations. In addition, due to Cantel's focus on offering the full circle of infection prevention (which has become a top priority for customers during the Covid-19 pandemic), Cantel has been able to generate higher revenue per procedure, as doctors have a much greater focus on infection control. Cantel is also seeing strong traction from its Cantel 2.0 strategic initiatives, including driving a greater presence in endoscopy outpatient surgery centers, having more strategic discussions with large U.S. health systems and driving greater penetration of procedure products in Europe. Despite the unpredictability of the pandemic. Cantel's guidance includes completing fiscal year 2021 with adjusted earnings before interest, taxes, depreciation and amortization margins of at least 21%.

hin255/Shutterstock.com

Our calculations show that Cantel Medical Corp. (NYSE: CMD) 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, Cantel Medical Corp. was in 22 hedge fund portfolios, compared to 21 funds in the third quarter. CMD delivered a 3.88% 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.