Brown Capital Management, an investment management company, released its “The Brown Capital Management International Small Company Strategy” Q3 2022 investor letter. A copy of the same can be downloaded here. The strategy returned -9.13% in the third quarter compared to an -8.25% return for the MSCI ACWI Ex US Small Cap Index. In addition, check the fund’s top five holdings to know its best picks in 2022.
Brown Capital Management highlighted stocks like Evotec SE (NASDAQ:EVO) in its Q3 2022 investor letter. Headquartered in Hamburg, Germany, Evotec SE (NASDAQ:EVO) is a drug discovery partner. On December 20, 2022, Evotec SE (NASDAQ:EVO) stock closed at $8.13 per share. One-month return of Evotec SE (NASDAQ:EVO) was -5.13%, and its shares lost 63.58% of their value over the last 52 weeks. Evotec SE (NASDAQ:EVO) has a market capitalization of $2.885 billion.
Brown Capital Management made the following comment about Evotec SE (NASDAQ:EVO) in its Q3 2022 investor letter:
“Evotec SE (NASDAQ:EVO) helps drugmakers save time and money by increasing the accuracy and decreasing the required time of successfully bringing drugs to the market. The company has two business segments, named Execute and Innovate. Execute focuses on high-throughput screening (HTS) that helps with the enormous task of sifting through millions of compounds and provides the starting point of drug discovery and development. Innovate is a platform developed to partner with pharmaceutical and biotech companies looking to discover successful drug candidates; industry-wide, 92% of drug candidates fail in the clinic before market launch. In exchange for providing these tools, Evotec takes partnership interests that result in milestone payments and royalty income upon successful commercialization.
During the quarter, Evotec reported strong revenue growth of 25%, although adjusted EBITDA declined 2%, below market consensus. The firm’s profitability was weighed down by ramping up investments in biologics manufacturing capacity in the U.S., as well as by supply-chain and energy-price pressure. We expect the costs associated with the new capacity to normalize as the company fills up the capacity through 2023. Evotec saw little resistance from partners in passing through higher costs, although price increases take time, especially for long-term contracts closed years ago. Our views remain unchanged as to Evotec’s value proposition and long-term growth prospects.”
Evotec SE (NASDAQ:EVO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 2 hedge fund portfolios held Evotec SE (NASDAQ:EVO) at the end of the third quarter, which was 1 in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2022 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.
