Is Guardant Health (GH) a smart long term buy?

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ClearBridge Investments, an investment management firm, has published its letter to investors “Aggressive Growth Strategy” for the first quarter of 2021 – a copy of which can be found downloaded here. ClearBridge’s aggressive growth strategy outperformed its benchmark Russell 3000 Growth in the first quarter. In absolute terms, the Strategy generated gains in seven of the eight sectors in which it was invested (out of a total of 11 sectors). You can check out the top 5 holdings of the fund to get an overview of their top bets for 2021.

ClearBridge Investments, in its letter to investors for the first quarter of 2021, mentioned Guardant Health, Inc. (NASDAQ: GH) and shared their views on the company. Guardant Health, Inc. is a precision oncology company based in Redwood City, California, which currently has a market capitalization of $ 12.6 billion. Year to date, GH has achieved a return of -2.75%, while its 12-month earnings are up 166.72%. As of June 23, 2021, the share closed at $ 127.64 per share.

Here’s what ClearBridge Investments has to say about Guardant Health, Inc. in its Q1 2021 letter to investors:

“Although equity participation has grown, not all sectors and industries have benefited. Healthcare, which is the strategy’s second largest overweight, has lagged in recent months, but we believe the development of positive vaccines and upcoming new clinics for other therapies will eventually lead to more. high recognition by investors Provider of tests and diagnostics Health guardian has appreciated considerably due to strong growth and the introduction of new products since we added it to the portfolio last year … “

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Our calculations show that Guardant Health, Inc. (NASDAQ: GH) does not belong to our list of 30 most popular stocks among hedge funds. At the end of the first quarter of 2021, Guardant Health, Inc. was in 41 hedge fund portfolios, compared to 52 fund in the fourth quarter of 2020. GH has generated a return of -6.14% in the last 3 months.

The reputation of hedge funds as savvy investors has been tarnished over the past decade, as their hedged returns could not keep up with the unhedged returns of stock indices. Our research has shown that small-cap hedge fund stock selection managed to beat the market by double digits every year between 1999 and 2016, but the margin for outperformance has shrunk in recent years. Nonetheless, we were still able to identify in advance a select group of hedge funds that have outperformed S&P 500 ETFs by 115 percentage points since March 2017 (see details here). We were also able to identify in advance a select group of hedge funds that underperformed the market by 10 percentage points per year between 2006 and 2017. Interestingly, the margin of underperformance of these stocks has increased in recent years. Investors who are long in the market and short on these stocks would have reported more than 27% per year between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, an activist hedge fund wants to buy this biotech share at $ 26 for $ 50. We therefore recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best stocks of batteries to choose the next Tesla which will offer a 10x return. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. We read letters from hedge fund investors and listen to equity pitches at hedge fund conferences. You can subscribe to our free daily newsletter at our home page.

Disclosure: none. This article was originally published on Monkey initiate.

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