Investment management company Bireme Capital recently released its fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. In 2023, the fund returned 21.3% net of fees underperforming the S&P 500’s 26.2%. The fund was up 448% net since inception in 2016 vs the S&P at 161%, an annual outperformance of 11.7%. Last year was the second calendar year in a row that the fund underperformed the S&P 500, and the first since 2019. Nonetheless, the firm is particularly proud of last year’s returns because 2023 was an extraordinarily tough year for the relative performance of active value managers. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Bireme Capital featured stocks such as The Clorox Company (NYSE:CLX) in the fourth quarter 2023 investor letter. Headquartered in Oakland, California, The Clorox Company (NYSE:CLX) offers consumer and professional products. On February 6, 2024, The Clorox Company (NYSE:CLX) stock closed at $154.77 per share. One-month return of The Clorox Company (NYSE:CLX) was 9.48%, and its shares gained 2.54% of their value over the last 52 weeks. The Clorox Company (NYSE:CLX) has a market capitalization of $19.208 billion.
Bireme Capital stated the following regarding The Clorox Company (NYSE:CLX)in its fourth quarter 2023 investor letter:
“As we entered the second half of 2023, the valuation of many consumer staples companies perplexed us. The SPDR Consumer Staples ETF traded at a healthy 24x earnings despite low-single-digit projected earnings growth and a dramatic rise in interest rates. On top of the rich valuations, many of the underlying businesses face long-term headwinds and have been papering over volume declines with price increases. We shorted a few of these companies in Q3, including The Clorox Company (NYSE:CLX).
In fiscal 2023 (ended in June), Clorox sold 10% fewer products than the year before. However, they raised prices by 16%, allowing the firm to report 4% revenue growth despite the sharp volume declines. This is not a sustainable way to grow a business. Tobacco companies operate similarly and trade at below 10 times earnings. In contrast, Clorox traded at more than 30x earnings when we initiated our short position.”
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The Clorox Company (NYSE:CLX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held The Clorox Company (NYSE:CLX) at the end of third quarter which was 34 in the previous quarter.
We discussed The Clorox Company (NYSE:CLX) in another article and shared the list of best consumer staples dividend stocks to buy. In addition, please check out our hedge fund investor letters Q4 2023 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.
