Is BioNTech SE (BNTX) A Smart Long-Term Buy?

·3 min read

Baillie Gifford, a large-scale investment management firm in the UK, published its "Long Term Global Growth Fund" second quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly return of 13.59% was recorded by the fund for the second quarter of 2021, compared to the 7.53% return of its MSCI ACWI benchmark. You can view the fund’s top 5 holdings to have an idea about their top bets for 2021.

In the Q2 2021 investor letter of Baillie Gifford, the fund mentioned BioNTech SE (NASDAQ: BNTX), and discussed its stance on the firm. BioNTech SE is a Germany-based biotechnology company, that currently has a $79.3 billion market capitalization. BNTX delivered a 302.78% return since the beginning of the year, while its 12-month returns are up by 299.89%. The stock closed at $328.35 per share on July 30, 2021.

Here is what Baillie Gifford has to say about BioNTech SE in its Q2 2021 investor letter:

"Short-term share price movements are not a good measure of a company’s long-term value. Our focus is, as always, on the business fundamentals of companies over five to ten years and beyond.

Among the top contributors to Fund performance in the second quarter was BioNTech. BioNTech has also had continued success with its Covid19 vaccine, delivering more than 450 million doses to 91 countries worldwide, generating revenue of €2 billion. It is aiming to deliver up to 3 billion doses by the end of 2021 and increase supply worldwide; it currently has a potential supply contract in China via Fosun Pharma that is pending approval. Beyond Covid, BioNTech is expanding its global footprint by establishing a regional headquarters in Singapore, which includes a state-of-theart mRNA manufacturing facility. The development of the oncology pipeline continues, with 14 product candidates now in 15 ongoing trials."


Photo by Steven Cornfield on Unsplash

Based on our calculations, BioNTech SE (NASDAQ: BNTX) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. BNTX was in 18 hedge fund portfolios at the end of the first quarter of 2021, compared to 17 funds in the fourth quarter of 2020. BioNTech SE (NASDAQ: BNTX) delivered a 74.39% return in the past 3 months.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

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

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