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Here’s Why Baron Asset Fund Likes DexCom (DXCM) Stock

Alex Smith
·1 min read

Baron Asset Fund recently published its first-quarter commentary – a copy of which can be downloaded here. During the first quarter of 2020, the Baron Asset Fund returned -16.63% (institutional shares). In comparison, the benchmark S&P 500 Index was down 19.60%, while the Russell Midcap Growth Index was down 20.04%.

In the said letter, Baron Asset Fund highlighted a few stocks and Dexcom Inc (NASDAQ:DXCM) is one of them. Dexcom is a medical device manufacturing company. Year-to-date, DXCM stock gained 69.6% and on May 4th it had a closing price of $352.51. Its market cap is of $34.1 billion. Here is what Baron Asset Fund said:

"DexCom, Inc. is a medical device manufacturer that makes continuous blood glucose monitoring devices for patients with diabetes. We believe that DexCom’s device is a superior method for monitoring blood sugar compared with finger sticks (the traditional method). We also believe that DexCom’s market opportunity is large–its core market consists of the 3.2 million insulin intensive patients in the U.S. plus another 3 million to 5 million insulin intensives outside the U.S. The company’s stock rose after it reported significantly higher sales and profits in the fourth quarter of 2019, driven by strong demand for the company's G6 device. Although we think DexCom's growth may be moderately impacted in the near term by the COVID-19 pandemic, we continue to believe the company has a long runway for growth."

In Q4 2019, the number of bullish hedge fund positions on DXCM stock increased by about 11% from the previous quarter (see the chart here).

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