Firebird Management LLC, an investment management company, released its “Firebird US Value Fund” Q3 2024 investor letter. A copy of the letter can be downloaded here. With a 0.5% decrease in the federal funds rate in the third quarter of 2024, the interest rate-lowering cycle appears to have begun. There is disagreement among market analysts over the final rate setting, however, it is generally agreed that at least one additional interest rate cut will occur in 2024. The portfolio has generated more than $124,000 in operating cash flow for every $1 million in market value during the past 12 months. Over the following five years, the firm anticipates that the operating cash flow of the portfolio will increase at a 9.7% CAGR. The FCF yield of the portfolio is approximately 7.1%, whereas the S&P 500 yield is 2.9%. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Firebird US Value Fund highlighted stocks like R1 RCM Inc. (NASDAQ:RCM) in the third 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. The one-month return of R1 RCM Inc. (NASDAQ:RCM) was 0.42%, and its shares gained 33.40% of their value over the last 52 weeks. On November 1, 2024, R1 RCM Inc. (NASDAQ:RCM) stock closed at $14.26 per share with a market capitalization of $6.019 billion.
Firebird US Value Fund stated the following regarding R1 RCM Inc. (NASDAQ:RCM) in its Q3 2024 investor letter:
“R1 RCM Inc. (NASDAQ:RCM) was sold because of the pending buyout. The company has been the subject of a curious buyout interest from two of its principal shareholders, who own over 60% of the company. At first, Tower Brook Capital, which is associated with R1’s major customer Ascension Health, was bidding for the company together with New Mountain Capital, which became a shareholder after selling its holding Cloudmed in cash and shares to R1 in 2022. While the original offer was rejected as inadequate, the bidding consortium fell apart, and New Mountain lowered the bid for the company, thinking that recent payment problems in the industry linked to a cyber-attack on a critical health interchange would make R1 more vulnerable and willing to accept a lower bid. Then Tower Brook Capital partnered with the former CEO (pushed out by the Cloudmed team) to come up with a higher bid, which was eventually accepted by the board. While we believe that R1 RCM has the potential to be a long-term beneficiary of the trend towards automation and artificial intelligence, given the limited upside remaining to the buyout price, we sold the shares and reinvested them into a new position.”
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 31 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held R1 RCM Inc. (NASDAQ:RCM) at the end of the second quarter which was 38 in the previous quarter. While we acknowledge the potential of R1 RCM Inc. (NASDAQ:RCM) 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 R1 RCM Inc. (NASDAQ:RCM) and shared the list of best NASDAQ stocks under $20 to buy. In addition, please check out our hedge fund investor letters Q3 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.