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Is Schrodinger (SDGR) a Smart Long-term Buy?

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Alex Smith
·3 min read
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Baron Health Care Fund recently published its third-quarter commentary – a copy of which can be downloaded here. During the third quarter of 2020, the Baron Health Care Fund returned 11.64% (institutional shares). In comparison, the benchmark S&P 500 Index was up 8.93%, while the Russell 3000 Health Care Index was up 6.48%. You should check out Baron’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Baron Health Care Fund highlighted a few stocks and Schrodinger Inc. (NASDAQ:SDGR) is one of them. Schrodinger Inc. (NASDAQ:SDGR) is a life sciences and materials science company. In the last three months, Schrodinger Inc. (NASDAQ:SDGR) stock gained 23.3% and on December 9th it had a closing price of $66.21. Here is what Baron Health Care Fund said:

"Schrodinger, Inc. is a hybrid computer science, physics, and biotechnology company that has an established software suite allowing drug developers to explore the endless range of possible drug/target interactions allowed via the rules governing single atom interactions. Given that Schrodinger was the best performing IPO in the entire biotechnology space in the first six months of 2020, we were not surprised to see some mean reversion in the third quarter. We remain investors for both the established software business and the biotechnology development arm."

Pressmaster/Shutterstock.com

In October, we published an article revealing that Andaz Private Investments is bullish on Schrodinger Inc. (NASDAQ:SDGR) stock. The investment firm believes that the investment case with Schrödinger is all about the speed at which the company is covering ground in the drug discovery space.

Our calculations showed that Schrodinger Inc. (NASDAQ:SDGR) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 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, 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 real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

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