Meridian Funds, managed by ArrowMark Partners, released its “Meridian Small Cap Growth Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. The market rally continued in the first quarter of 2024, supported by positive inflation data and robust economic signs. The fund returned 6.04% (net) in the first quarter compared to the Russell 2000 Growth Index’s 7.58% return. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Meridian Small Cap Growth Fund highlighted stocks like Consensus Cloud Solutions, Inc. (NASDAQ:CCSI), in the first quarter 2024 investor letter. Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) provides information delivery services with a software-as-a-service platform. The one-month return of Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) was -19.48%, and its shares lost 50.02% of their value over the last 52 weeks. On June 18, 2024, Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) stock closed at $16.29 per share with a market capitalization of $313.097 million.
Meridian Small Cap Growth Fund stated the following regarding Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) in its first quarter 2024 investor letter:
“Consensus Cloud Solutions, Inc. (NASDAQ:CCSI), a leading supplier of both secure data delivery for enterprise healthcare interoperability and cloud fax solutions to small office home office (SoHo) customers, was spun out of longtime holding J2 Global (now Ziff Davis) in the fourth quarter of 2022. Consensus has historically enjoyed a high percentage of recurring revenues, low churn in the enterprise segment, and high margins. Much of the company’s current strategic focus is to build upon its legacy digital cloud fax service for the enterprise healthcare sector where data security and interoperability are key concerns. Despite an earnings report in line with expectations, the stock declined during the quarter on lower[1]than-expected guidance. The healthcare business continues to be under macro pressure, largely driven by IT staffing issues that are slowing enterprise-level adoptions of Consensus’ solutions. The company has rightly downshifted to a lower revenue reality and management is proactively shifting marketing spend from inefficient top-line growth efforts in its SoHo segment toward higher revenue generating customers in healthcare. We expect healthcare’s macro issues to eventually ease, resulting in revenue growth accelerating from the low single-digit growth today towards low double digits. The stock was recently trading at an attractive three times earning multiple with more than a 20% free cash flow yield. We believe that even modest growth from here and continued deleveraging could result in a materially higher share price. We maintained our position in the company during the quarter.”
A businesswoman signing an online document using a cloud-faxing solution.
Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) at the end of the first quarter which was 14 in the previous quarter. While we acknowledge the potential of Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) 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 Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) and shared the list of best affordable tech stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
