Why Wedgewood Partners is Betting on Alcon (ALC) Stock

Alex Smith

Wedgewood Partners recently released its Q3 2020 Investor Letter, a copy of which you can download here. The Fund returned 10.77% for the third quarter of 2020. Meanwhile, the benchmark S&P 500 Index and the Russell 1000 Value Index gained 8.93% and 5.59%, respectively. You should check out Wedgewood Partners' top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Wedgewood Partners highlighted a few stocks and Alcon Inc (NYSE:ALC) is one of them. Alcon Inc (NYSE:ALC) is a medical company specializing in eye care products. Year-to-date, Alcon Inc (NYSE:ALC) stock gained 10% and on October 16th it had a closing price of $61.81. Here is what Wedgewood Partners said:

"Alcon’s results were challenged by hospital and surgery center shutdowns, more so than our other medical technology holding, Edwards Lifesciences, because eye surgeries are less lifethreatening than structural heart problems. However, Alcon has a robust pipeline of new products that should restore the Company’s growth profile over the next few quarters. In addition, Alcon should be able to deliver steady margin expansion from a combination of higher valued products as well as better leverage from the Company’s fixed cost structure as the operational separation from Novartis is substantially completed."

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In Q2 2020, the number of bullish hedge fund positions on Alcon Inc (NYSE:ALC) stock decreased by about 16% from the previous quarter (see the chart here), so a number of other hedge fund managers don't believe in Alcon's growth potential. Our calculations showed that Alcon Inc (NYSE:ALC) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 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. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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