Brown Capital Management Mid Company Fund recently released its Q4 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 16.55% (inst. class) for the quarter, underperforming its benchmark, the Russell Midcap Growth Index which returned 19.02% in the same quarter. You should check out Brown Capital Management’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q4 2020 Investor Letter, the fund highlighted a few stocks and Align Technology Inc (NASDAQ:ALGN) is one of them. Align Technology Inc (NASDAQ:ALGN) is a manufacturer of 3D digital scanners and the Invisalign clear aligners used in orthodontics. In the last three months, Align Technology Inc (NASDAQ:ALGN) stock gained 15% and on March 1st it had a closing price of $565.11. Here is what the fund said:
“Align Technology is a leading manufacturer in the $5-billion global orthodontics market with Invisalign, a system of clear aligners designed and manufactured by the company as an alternative to traditional orthodontic brackets and wires. Recently, Align increased its assessments of the addressable market for clear aligners to 15 million existing orthodontic cases globally, plus another 500 million in potential cases based on malocclusion incidence and income levels. This is up from 12 million and 300 million, respectively. It is also worth noting that Invisalign can now treat 90% of orthodontic cases, up from 70-80% previously. Align has steadily expanded its market opportunity by making Invisalign better clinically, and by reducing the friction for adoption for both providers and consumers. Interestingly enough, the pandemic seems to have accelerated the migration away from wires and brackets, and increased consumer interest in aesthetically pleasing alternatives, such as clear aligners. People want to look good on their Zoom calls.
For the past three years, investors have debated whether new entrants would be a net positive or net negative for Align’s business. Thus far, the bullish argument for market expansion is outweighing the bearish argument for pricing and margin erosion. It took only one quarter for Align to return to pre-pandemic volume levels (up 29% in the third quarter). We continue to monitor Align Technology given some of our previous concerns around competition, though recent results are encouraging.”
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In Q3 2020, the number of bullish hedge fund positions on Align Technology Inc (NASDAQ:ALGN) stock increased by about 15% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Align’s growth potential. Our calculations showed that Align Technology Inc (NASDAQ:ALGN) isn’t ranked among the 30 most popular stocks among hedge funds.
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.
