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Here’s Why Tandem Diabetes Care (TNDM) Became Alger Small Cap’s Top Detractor

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Alger, an investment management firm, published its ‘Alger Small Cap Focus Fund’ fourth quarter 2020 investor letter – a copy of which can be downloaded here. In the letter, the fund highlighted their largest portfolio sector weightings, which is in the Health Care and Information Technology sector, and their comments on notable companies. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Alger Small Cap Focus Fund, in their Q4 2020 investor letter, mentioned Tandem Diabetes Care, Inc. (NASDAQ: TNDM) and emphasized their views on the company. Tandem Diabetes Care, Inc. is a California-based medical service manufacturer that currently has a $5.5 billion market capitalization. Since the beginning of the year, TNDM delivered a -7.67% return, but its 12-month gains are still up by 54.33%. As of March 12, 2021, the stock closed at $88.34 per share.

Here is what Alger Small Cap Focus Fund has to say about Tandem Diabetes Care, Inc. in their Q4 2020 investor letter:

"Tandem Diabetes Care provides the t:slim X2 Insulin Delivery System for treating insulin-dependent diabetes. Tandem offers the smallest durable insulin pump available, and with DexCom CGM (continuous glucose monitoring) integration. Tandem has led the development of more automated control of insulin dosing featuring its BasalHQ and Control-IQ algorithms. The company also sells insulin reservoir cartridges and infusion sets for use with its pumps. Tandem stock underperformed after the company announced third quarter results and 2020 guidance that was somewhat weaker than expected. As a durable insulin pump company, Tandem is more tied to new patient demand, which has been suppressed due to the pandemic. There are also some competitive concerns in 2021. with two other established companies planning to launch new products. However, Tandem also has a series of new products for 2021. including its mobile bolus feature, its new t-sport pump and an enhanced version of its current Control-IQ algorithm. We believe these new products are being underappreciated by investors."

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

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Our calculations show that Tandem Diabetes Care, Inc. (NASDAQ: TNDM) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Tandem Diabetes Care, Inc. was in 26 hedge fund portfolios, compared to 30 funds in the third quarter. TNDM delivered a -2.92% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 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. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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