Billionaire investor Steven Cohen (Trades, Portfolio), the leader of Point72 Asset Management, disclosed earlier this week he entered a new position in Inari Medical Inc. (NARI, Financial).
To generate superior risk-adjusted returns, the guru's Stamford, Connecticut-based firm invests in a wide range of asset classes worldwide. Its long-short strategy is based on bottom-up research processes that focus on fundamentals and macroeconomic conditions.
According to GuruFocus Real-Time Picks, a Premium feature based on 13D, 13G and Form 4 filings, Cohen picked up 2.61 million shares of the Irvine, California-based health care company on Feb. 22, allocating 0.49% of the equity portfolio to the stake. The stock traded for an average price of $55.13 per share on the day of the transaction.
GuruFocus data shows he has a history with the stock, having revealed a small position via 13F filings in the third quarter of 2020. He most recently sold out of Inari in the second quarter of 2022.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
About Inari Medical
Founded in 2011, Inari Medical manufactures medical devices that treat patients suffering from a variety of venous diseases like deep vein thrombosis. Its portfolio of products includes the ClotTriever, which is used to remove clots from peripheral blood vessels, and the FlowTriever, which is used to treat pulmonary embolisms. Other products listed on the company’s website are the InThrill System, FlowStasis and FlowSaver.
The company consists of only one segment, Mechanical Thrombectomy Devices, which raked in $227 million in revenue in fiscal 2021.
Valuation
The company has a $3.02 billion market cap; its shares were trading around $56.27 on Tuesday with a price-book ratio of 7.24 and a price-sales ratio of 8.37.
Since its initial public offering in May of 2020, the stock has gained around 32.35%.
At 28 out of 100, the GF Score suggests the company has weak performance potential on the back of a high financial strength rank and a moderate profitability rating. However, since Inari did not receive ratings for the three other criteria, the score may not accurately reflect its full potential.
GuruFocus rated Inari’s financial strength 8 out of 10, driven by a robust Altman Z-Score of 22.52 that implies it is in good standing. The Sloan ratio, however, is indicative of poor earnings quality.
The company’s profitability did not fare as well, scoring a 4 out of 10 rating due to negative margins and returns on equity, assets and capital that are underperforming versus competitors. Further, the Piotroski F-Score of 4 out of 9 means conditions are typical of a stable company.
Recent earnings
Inari Medical reported its fourth-quarter and full-year 2022 financial results on Feb. 27.
For the three months ended Dec. 31, it posted a 30% increase in total revenue from the prior-year quarter to $107.8 million. The net loss of $5.8 million, or 11 cents per share, fell from income of $1.1 million, or 2 cents per share, a year ago.
For the full year, the company recorded $383.5 million in revenue and a net loss of $29.3 million. While sales increased from 2021, net income declined.
In a statement, CEO Drew Hykes commented on Inari Medical’s performance.
“Crisp execution across all five of our growth drivers generated robust revenue growth in the fourth quarter,” he said. “We are especially pleased with the milestones we achieved across several clinical studies as well as two important new product launches. Our efforts continue to drive market expansion and uptake of our devices while further distancing Inari from both existing and future competition.”
Looking ahead, the company expects revenue of $470 million to $480 million for fiscal 2023.
Guru interest
Cohen is by far the company’s largest guru shareholder with a 4.87% stake.
Other gurus invested in Inari Medical as of the end of the fourth quarter of 2022 included Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Ron Baron (Trades, Portfolio), the Eaton Vance Worldwide Health Sciences Fund (Trades, Portfolio) and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates.
Portfolio composition
Cohen's $28.95 billion equity portfolio, which was composed of 1,423 stocks as of the three months ended Dec. 31, is most heavily invested in the health care and technology sectors.
Other medical devices and instruments stocks the guru held as of the end of the fourth quarter included Zimmer Biomet Holdings Inc. (ZBH, Financial), Inspire Medical Systems Inc. (INSP, Financial), Intuitive Surgical Inc. (ISRG, Financial), Icon PLC (ICLR, Financial), Alcon Inc. (ALC, Financial), Bio-Rad Laboratories Inc. (BIO, Financial), Glaukos Corp. (GKOS, Financial), ResMed Inc. (RMD, Financial) and The Cooper Companies Inc. (COO, Financial).
