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Why BioSpecifics Technologies (BSTC) Stock is a Compelling Investment Case

Alex Smith

Summers Value Partners recently released its Q2 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 1.8% for the first half of 2020, outperforming its benchmark, the Russell 2000 Index which returned -13.6% in the same period. You should check out Summers Value Partners' top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Summers Value Partners' highlighted a few stocks and BioSpecifics Technologies Corp (NASDAQ:BSTC) is one of them. BioSpecifics Technologies Corp (NASDAQ:BSTC) is a biopharmaceutical company. Year-to-date, BioSpecifics Technologies Corp (NASDAQ:BSTC) stock gained 17.4% and on August 10th it had a closing price of $67.90. Here is what Summers Value Partners' said:

"Biospecifics has been held in the Fund since inception. During the quarter, the company named Joe Truitt as its new CEO. Mr. Truitt was formerly the CEO of Achillion, which was sold to Alexion (ALXN) for $1.2 billion in early 2020. We spoke to Mr. Truitt after the announcement and feel strongly that the company made the right decision by naming him as CEO. Mr. Truitt will be focused on expanding the intellectual property portfolio around Xiaflex, which should lead to a longer period of patent life and economic life for the company. He is also working to identify complementary assets to expand the company’s pipeline.

In a separate piece of positive news, the company’s marketing partner, Endo Pharmaceuticals (ENDP), received FDA approval for Xiaflex to treat cellulite in early July. Endo expects to launch Xiaflex into this new cash-pay indication in early 2021. The launch was delayed by several months due to the COVID-19 pandemic. We continue to be bullish on the commercial opportunity for Xiaflex as the only approved pharmacologic approach to treating cellulite. We highlighted the investment case for the cellulite indication at the Value x Vail conference last year and the presentation can be found here."

Countries With Highest Medical Research Spending
Countries With Highest Medical Research Spending

Nestor Rizhniak/Shutterstock.com

In Q1 2020, the number of bullish hedge fund positions on BioSpecifics Technologies Corp (NASDAQ:BSTC) stock decreased by about 18% from the previous quarter (see the chart here), so a number of other hedge fund managers don't seem to agree with BioSpecifics Technologies' growth potential. Our calculations showed that BioSpecifics Technologies Corp (NASDAQ:BSTC) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 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. With Federal Reserve creating trillions of dollars out of thin air, we believe gold prices will keep increasing. So, we are checking out gold stocks like this small gold mining company. We go through lists like the 10 most profitable companies in America 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. You can subscribe to our free enewsletter below to receive our stories in your inbox:


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