RiverPark Advisors, LLC an independently-owned investment firm, recently published its first-quarter RiverPark Large Growth Fund commentary – a copy of which can be downloaded here. During the first quarter of 2020, the RiverPark Large Growth Fund returned -14.9%, compared to the total return of -14.1% by the Russell 1000 Growth Index and -19.6% by the S&P 500 Index.
In the said letter, RiverPark Advisors highlighted a few stocks and Bill.Com Holdings Inc. (NYSE:BILL) is one of them. Bill.Com engages in the provision of cloud-based software solutions. Year-to-date, BILL stock gained 45.2% and on May 1st it had a closing price of $55.73. Its market cap is of $4.0 billion. Here is what RiverPark Advisors said:
“Bill.com is a leader in automation back office software for small and midsize businesses (SMB). The company creates seamless connections between its customers, their suppliers and their clients, so that customers can generate and process invoices, send and receive payments, and sync with each other’s accounting systems.
More than 90% of SMBs are still dependent on manual accounts payable and accounts receivable processes, including mailing invoices, printing checks, waiting for payments and storing paper. This $9 billion U.S. (and $30 billion global) market is underserved by existing financial software solutions and Bill.com, while an industry leader, still has only about 1% penetration, providing a long runway of growth. Despite its low penetration, Bill has unique scale in the market, having built a network of 1.8 million connected businesses, paving the way for new customers to implement and integrate more seamlessly.
For its most recent quarter, Bill.com reported 50% year-over-year revenue growth and even faster core subscription and transaction revenue growth of 61%, an acceleration from the previous quarter’s 57% growth. We believe that the company can grow revenue at greater than 30% per year for years to come. The company’s Non-GAAP gross margin of 78% increased 220 basis points year-over-year, and, as a SaaS software provider, Bill.com’s gross margin should continue to improve.”
In Q4 2019, the number of bullish hedge fund positions on BILL stock increased from the previous quarter (see the chart here).
RiverPark Advisors comments on DexCom
In the said letter, RiverPark Advisors also highlighted Dexcom Inc (NASDAQ:DXCM) stock. Dexcom is a medical device company. Here is what RiverPark Advisors said:
“DexCom is the leading medical device company focused on continuous glucose monitoring (CGM) systems for people with diabetes. The company has developed a small implantable device that continuously measures glucose levels in subcutaneous tissue (just under the skin), then transmits the blood sugar levels from a sensor on the patient to mobile devices allowing real-time monitoring.
Diabetes, a chronic, life-threatening disease in which the body is unable to produce sufficient insulin, is one of the largest health epidemics in the United States and around the world. According to the ADA, one in every four healthcare dollars was spent on treating people with diabetes. While the CGM market is competitive, Dexcom is the market leader and grew revenue 43% last year to $1.5 billion. Dexcom’s CGM is a platform technology addressing multiple diabetes populations and providers, and eventually other uses for its sensor technology, providing the company a long runway for growth (greater than 20% revenue growth for the years to come). We also believe that the business will be extremely profitable at scale. We expect the company to generate 40% annual EPS growth over the next few years while also generating sizable excess free cash flow.”
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.
