SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, the strategy returned 7.85% on a gross basis (7.65% net) compared to a 5.21% return for the Russell 2000 Index and 3.18% for the Russell 2000 Value Index. The strategy returned 24.28% on a gross basis (23.36% net) over the trailing twelve months compared to 12.31% and 6.01%, respectively, for the indexes. In addition, please check the top 5 holdings of the strategy to know its best pick in 2023.
SouthernSun Small Cap Strategy highlighted stocks like U.S. Physical Therapy, Inc. (NYSE:USPH) in the second quarter 2023 investor letter. Based in Houston, Texas, U.S. Physical Therapy, Inc. (NYSE:USPH) operates outpatient physical therapy clinics. On August 1, 2023, U.S. Physical Therapy, Inc. (NYSE:USPH) stock closed at $118.79 per share. One-month return of U.S. Physical Therapy, Inc. (NYSE:USPH) was 1.48%, and its shares lost 6.12% of their value over the last 52 weeks. U.S. Physical Therapy, Inc. (NYSE:USPH) has a market capitalization of $1.754 billion.
SouthernSun Small Cap Strategy made the following comment about U.S. Physical Therapy, Inc. (NYSE:USPH) in its second quarter 2023 investor letter:
“U.S. Physical Therapy, Inc. (NYSE:USPH) was one of the top contributors in the Small Cap strategy in the second quarter. As a reminder, USPH is one of the largest operators of outpatient physical and occupational therapy clinics with 647 locations across 40 states. They also have a growing Industrial Injury Prevention business, and they are one of two publicly traded, pure play providers. They reported strong volumes and increasing visits per clinic per day, resulting in 16% top-line growth, double-digit income improvement, and record first quarter EBITDA. 65% of their revenue is from private insurers, and they are making good progress on rate negotiations, which is more than offsetting reductions in Medicare reimbursements. On their recent call, they also said that employee turnover for clinical positions has improved, and costs per visit had come down from $83.09 to $81.97 – which is encouraging in light of the inflationary pressures that the health care industry has experienced since the pandemic. In June, the company issued $150 million of common stock and used the proceeds to pay down debt and position the company for future acquisitions. They were able to accomplish the transaction in a way that was accretive to existing shareholders. We spent time with their team on multiple occasions this quarter and are confident in their ability to continue to acquire practices in this highly fragmented industry. In the second quarter, we added USPH to the SMID cap portfolio.”
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U.S. Physical Therapy, Inc. (NYSE:USPH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 8 hedge fund portfolios held U.S. Physical Therapy, Inc. (NYSE:USPH) at the end of the first quarter which was 10 in the previous quarter.
We discussed U.S. Physical Therapy, Inc. (NYSE:USPH) in another article and shared Conestoga Micro Cap Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q2 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.
