Wasatch Global Investors, an asset management company, released its “Wasatch Small Cap Growth Strategy” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. Small-cap equities experienced volatility in the third quarter but ultimately achieved solid gains. In July, they rose sharply due to optimism about a potential soft landing for the U.S. economy and anticipated interest-rate cuts. In September, the Federal Reserve lowered its benchmark interest rate for the first time since 2020. This environment led investors to shift their focus from mega-cap technology stocks to small-cap equities. Against this backdrop, the strategy gained 9.45%, outperforming the benchmark Russell 2000® Growth Index, which was up 8.41%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Wasatch Small Cap Growth Strategy highlighted stocks like Inspire Medical Systems, Inc. (NYSE:INSP), in the third quarter 2024 investor letter. Inspire Medical Systems, Inc. (NYSE:INSP) is a medical technology company, focuses on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea. The one-month return of Inspire Medical Systems, Inc. (NYSE:INSP) was 4.83%, and its shares gained 3.62% of their value over the last 52 weeks. On January 3, 2025, Inspire Medical Systems, Inc. (NYSE:INSP) stock closed at $198.68 per share with a market capitalization of $5.954 billion.
Wasatch Small Cap Growth Strategy stated the following regarding Inspire Medical Systems, Inc. (NYSE:INSP) in its Q3 2024 investor letter:
“Inspire Medical Systems, Inc. (NYSE:INSP) also contributed. The company develops minimally invasive solutions for patients with obstructive sleep apnea (OSA). Prior to the quarter, the stock had been down due to concerns about how GLP-1 weight-loss drugs might affect Inspire’s addressable market. A large pharmaceutical firm had reported positive results for its obesity medicine in a clinical trial for the treatment of OSA. However, we thought those concerns were overdone. Most obese patients with OSA are more likely to suffer from complete or lateral-wall collapse of the airway and, therefore, wouldn’t be good candidates for Inspire’s device, which is designed to prevent airway collapse at the base of the tongue. The company’s recent strong quarterly results, which exceeded management’s guidance, indicate that demand for Inspire’s solutions remains strong and drove the stock price higher. Going forward, we continue to like Inspire’s growth potential. In our view, weight-loss drugs may expand Inspire’s total addressable market by causing more people with obesity to seek treatment within the health-care system. Following weight loss, these patients could become more likely to benefit from Inspire. All in all, the population of people diagnosed with sleep apnea is very large, and we believe Inspire is well-positioned to treat a good portion of them.”
A medical professional performing a minimally invasive procedure while using the company’s technology.
Inspire Medical Systems, Inc. (NYSE:INSP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Inspire Medical Systems, Inc. (NYSE:INSP) at the end of the third quarter which was 35 in the previous quarter. Inspire Medical Systems, Inc. (NYSE:INSP) generated $203.2 million in revenues, representing a 33% increase from Q3 2023. While we acknowledge the potential of Inspire Medical Systems, Inc. (NYSE:INSP) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Inspire Medical Systems, Inc. (NYSE:INSP) and shared Piper Sandler’s top technical stock picks and the top stocks. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.