Voss Capital, LLC an investment management company, released its first-quarter 2024 investor letter. A copy of the letter can be downloaded here. Voss Capital’s funds, Voss Value Fund, LP, and the Voss Value Offshore Fund, Ltd returned +9.2% and +9.0% to investors net of fees and expenses respectively, in the first quarter compared to a +5.2% return for the Russell 2000 Index, 2.9% return for the Russell 2000 Value Index, and +10.6% return for the S&P 500 Index. The fund’s total gross exposure stood at 167.8% and the net long exposure was 92.9% at the end of the first quarter. The weight of the fund’s top 10 longs was 81.1% and the top 10 shorts was 24.2%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Voss Capital highlighted stocks like R1 RCM Inc. (NASDAQ:RCM) in the first quarter 2024 investor letter. R1 RCM Inc. (NASDAQ:RCM) offers technology-driven solutions for financial performance and patient experience of health systems, hospitals, and physician groups. R1 RCM Inc.’s (NASDAQ:RCM) one-month return was 0.78%, and its shares lost 23.27% of their value over the last 52 weeks. On May 31, 2024, R1 RCM Inc. (NASDAQ:RCM) stock closed at $12.86 per share with a market capitalization of $5.417 billion.
Voss Capital stated the following regarding R1 RCM Inc. (NASDAQ:RCM) in its first quarter 2024 investor letter:
“Just as we hit send on the Q4 letter, R1 RCM Inc. (NASDAQ:RCM) received a non-binding buyout offer from its largest shareholder, private equity firm New Mountain Capital (32.3% ownership). At first the Board encouraged New Mountain to collaborate with the second largest holder, TowerBrook Capital (29.5% ownership), as they knew TowerBrook would likely not be a seller at such a low-ball valuation (minority shareholder “squeeze outs” by existing PE owners are a recurring theme this year). R1’s board then backtracked eight days later and put New Mountain in timeout and hired both Barclays and Qatalyst Partners (a boutique M&A firm with stellar reputation of getting tech companies sold) to run a full auction process. We did not sell any RCM on the initial pop (thinking it to be a more stable merger-arb type situation) and unfortunately rode the stock all the way back down to its pre-deal announcement price. We think the market is underestimating the probability of a higher buyout offer, even if it is from New Mountain and TowerBrook and the gains will quickly be recouped. If there is no deal, we believe the upside will be much greater over the next few years as R1 continues to execute and on-board large customers and reduce costs using AI. Our base case price target moves down to $16 if a deal is commenced and remains $28 (133% upside) over the next 2-3 years if there is no buyout. This is based on 14x 2026 adjusted EBIT (EBITDA-Capex), or 12x Q4 2026 EBIT run-rate, a large discount to comps.”
A warm smile from a patient towards a receptionist at a doctor’s office.
R1 RCM Inc. (NASDAQ:RCM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held R1 RCM Inc. (NASDAQ:RCM) at the end of the first quarter which was 30 in the previous quarter.
In the first quarter R1 RCM Inc. (NASDAQ:RCM) delivered strong results and reported approximately $604 million in revenue and $152 million in adjusted EBITDA.
In another article, we discussed R1 RCM Inc. (NASDAQ:RCM) and shared the list of best healthcare stocks to buy under $20. Voss Capital added R1 RCM Inc. (NASDAQ:RCM) to its portfolio in the previous quarter. In addition, please check out our hedge fund investor letters Q1 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.
