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Should Value Investors Buy Inogen (INGN) Stock?

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Baron Discovery Fund recently published its third-quarter commentary – a copy of which can be downloaded here. During the third quarter of 2020, the Baron Discovery Fund returned 18.83% (institutional shares). This was 11.67% better than the Russell 2000 Growth Index, the Fund’s primary benchmark index. You should check out Baron Discovery Fund’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 Discovery Fund highlighted a few stocks and Inogen Inc (NASDAQ:INGN) is one of them. Inogen Inc (NASDAQ:INGN) develops and manufactures healthcare products. Year-to-date, Inogen Inc (NASDAQ:INGN) stock lost 48.4% and on December 1st it had a closing price of $35.28. Here is what Baron Discovery Fund said:

"Inogen, Inc. manufactures and sells portable oxygen concentrators (“POCs”) to patients with severe breathing disorders such as emphysema. As we discussed in our second quarter letter, Inogen beat estimates for the first quarter (announced in the second quarter), but in the second quarter it withdrew fiscal year 2020 guidance due to uncertainty related to COVID-19. The pandemic is causing lower volumes of patient visits to pulmonologists, and therefore fewer prescriptions for the company’s POCs. We continue to believe that Inogen remains well-positioned in the space and that its shares will rally as the pandemic tapers. In the meantime, the company is valued at a reasonable multiple of cash flow, and Inogen has maintained its market leading share for POCs. We also believe that within the next few years we will see an inflection point where the oxygen tank industry no longer holds enough economies of scale to maintain its asset heavy delivery model. When this occurs, POC market share will accelerate and Inogen will gain more than its fair share of revenues and incremental cash flow."

Countries with the Lowest Cancer Rates in the World in 2018
Countries with the Lowest Cancer Rates in the World in 2018

adriaticfoto/Shutterstock.com

In Q2 2020, the number of bullish hedge fund positions on Inogen Inc (NASDAQ:INGN) stock increased by about 58% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Inogen's growth potential. Our calculations showed that Inogen Inc (NASDAQ:INGN) 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.