We recently published a list of Billionaire Stanley Druckenmiller’s Top 10 Stock Picks. In this article, we are going to take a look at where Natera, Inc. (NASDAQ:NTRA) stands against other Billionaire Stanley Druckenmiller’s stock picks.
Druckenmiller on the Fed’s Actions
On November 6, billionaire Stanley Druckenmiller appeared in a podcast, In Good Company, hosted by Nicolai Tangen, CEO of Norges Bank Investment Management. Druckenmiller shared his opinion on the easing cycle and the role of the Fed in the current economic backdrop. He shared that he is primarily keeping a close look at companies and is not seeing any signs of weakness, other than the housing market, that too because of elevated price levels. He also added that for the next 3 to 6 months, he does not expect any economic problems to overshadow the market.
Druckenmiller emphasized that the financial conditions are of more interest to him and that they have been very “loose, looser than they were when the Fed actually started tightening.” He is also particularly interested to see if the market is currently in the “70s rally since 2021” when the inflationary period started, expressing his concerns over inflation moving forward. In addition to inflationary concerns, Druckenmiller is also worried that the Fed had declared victory a tad bit early, lacking confidence in the current market backdrop.
He believes that with a 50 basis point cut, roaring equities, and no material weakness, the market may turn up again. Druckenmiller added that the Fed is “obsessed” with a soft landing and emphasized that “fine-tuning” and “worrying about a soft landing” is not their job. The reason why there is an urgency for a soft landing is because the Fed let the inflation rate jump in the first place, he added. Speaking of the Fed’s actions and forward guidance, Druckenmiller highlighted that the Fed believes that if it changes its due course of action, it may lose credibility, leaving its hands tied.
Stanley Druckenmiller is an American billionaire, investor, and founder of Duquesne Capital, with a net worth of $6.9 billion, as of December 14, 2024. Druckenmiller has made a fortune as a hedge fund manager for 30 big years and now manages money from his family office. He also worked with George Soros until 2000, a renowned investor known for shorting the pound in 1992. He also shares interesting opinions on the money market and the economy. In Q3 2024, Druckenmiller initiated 33 new positions, ending the quarter with a portfolio of $2.95 billion in 13F securities. With that, let’s discuss his top stock picks as of Q3 2024.
Our Methodology
We scanned Duquesne Capital’s Q3 2024 portfolio and picked the fund’s top 13F holdings. Additionally, we’ve also added overall hedge fund sentiment for each stock, as of Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A laboratory environment with technicians in lab coats conducting molecular testing services.
Natera, Inc. (NASDAQ:NTRA)
Duquesne Capital’s Stake Value: $452,812,000
Number of Hedge Fund Holders: 62
Natera, Inc. (NASDAQ:NTRA) is the largest holding of billionaire Stanley Druckenmiller. His fund increased its position by 81% in the third quarter of 2024. NTRA is a clinical genetic testing company based in Texas, United States. In the third quarter of 2024, the company generated $439.8 million in total revenues, a record increase of 63.9% year-over-year. Product revenues, at the same time, grew by 64.4% in the same period. Consequently, the company raised guidance for the FY 2024 revenue to $1.64 billion.
Natera, Inc. (NASDAQ:NTRA) is growing rapidly and its rapid approvals coupled with the product line is proof of that. The quarter has been transformative for the company in terms of gross margins, cash flow, and product volumes. During the same quarter, the company processed a record 775,000 tests, up from 626,000 in the third quarter of 2023. Overall, research and development costs are expected to reach $375-$400 million, positioning Natera, Inc. (NASDAQ:NTRA) as an emerging biotechnology company.
Fred Alger Management stated the following regarding Natera, Inc. (NASDAQ:NTRA) in its Q3 2024 investor letter:
“Natera, Inc. (NASDAQ:NTRA) is a specialty lab providing genetic testing services in the reproductive health, oncology and transplant markets. Reproductive health tests are run to screen for common genetic disorders such as trisomy 13, 18, and 21 in pregnant women – these tests are also known as non-invasive prenatal testing (NIPT). The company’s oncology franchise is led by Signatera, a test used to detect minimal residual disease (MRD) – the applications of this test are primarily to monitor therapy response and detect cancer recurrence. Lastly, Natera’s transplant franchise is led by Prospera, a test used to monitor transplant organ rejection. Natera’s tests are all based on the company’s proprietary liquid biopsy platform to detect cell-free DNA. During the quarter, shares contributed to performance after the company reported better-than-expected fiscal second quarter revenues, driven by strong volume growth from new and existing patients. Moreover, higher pricing and product cost control led to gross margin expansion, as management believes this trend should continue as key productivity initiatives like less costly sequencing in the neo-natal franchise are just beginning to positively impact earnings. Importantly, Natera achieved positive cash flow for the second consecutive quarter.”
Overall, NTRA ranks 1st on our list of Billionaire Stanley Druckenmiller’s stock picks. While we acknowledge the potential of NTRA to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NTRA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.