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Is Edwards Lifesciences (EW) a Great Value Stock Right Now?

Alex Smith

Artisan Mid Cap Fund recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of -11.55% for the quarter (investor class), outperforming their benchmark, the Russell Midcap Index which returned -27.07% in the same quarter. You should check out Artisan Mid Cap Fund’s top 5 stock picks which helped them beat the market by nearly 16 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.

In the said letter, Artisan Mid Cap Fund 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 4.4% and on May 8th it had a closing price of $217.84. Its market cap is of $46.1 billion. Here is what Artisan Mid Cap Fund said:

"Edwards Lifesciences is the leader in transcatheter aortic valve replacements (TAVR)—one of the fastest-growing, large medical device markets globally. While we believe the company will experience further momentum in the US and European TAVR markets, other parts of the company’s business are facing headwinds. Clinical trials for the company’s transcatheter mitral and tricuspid therapies have been pushed out as hospitals focus on COVID-19, there is little margin expansion expected in 2020, and there is uncertainty surrounding the potential costs from a pending intellectual property lawsuit related to its PASCAL valve. Given these headwinds, its relatively high valuation, and with the market cap outgrowing our mid-cap mandate, we exited our position."

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), so a number of other hedge fund managers don’t seem to agree with EW’s potential growth concerns.

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