White Falcon Capital Management, an investment fund manager, released its second quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, the fund was up 6.9% compared to the S&P 500 (CAD), the MSCI All Country (CAD), and the S&P TSX’s returns of 6.5%, 3.9%, and 1.2%, respectively. In the second quarter, the portfolio benefited from the rise in technology stocks. In addition, please check the fund’s top five holdings to know its best picks in 2023.
White Falcon Capital Management highlighted stocks like EPAM Systems, Inc. (NYSE:EPAM) in the second quarter 2023 investor letter. Headquartered in Newtown, Pennsylvania, EPAM Systems, Inc. (NYSE:EPAM) is a digital platform engineering and software development services provider. On July 17, 2023, EPAM Systems, Inc. (NYSE:EPAM) stock closed at $242.89 per share. One-month return of EPAM Systems, Inc. (NYSE:EPAM) was 10.65%, and its shares lost 20.59% of their value over the last 52 weeks. EPAM Systems, Inc. (NYSE:EPAM) has a market capitalization of $14.065 billion.
White Falcon Capital Management made the following comment about EPAM Systems, Inc. (NYSE:EPAM) in its second quarter 2023 investor letter:
“In the appendix to this letter, we present our updated thoughts on EPAM Systems, Inc. (NYSE:EPAM). EPAM Systems was a big winner for White Falcon last year (we first wrote about it in our Q1 2022 letter). We trimmed about half of our position close to the highs but the other half of the position is down close to 50% from the highs and back to the original cost base. After growing at high rates for the last 10 years, EPAM has stumbled and guided to negative revenue growth for this year. In addition, some investors are worried about the impact of AI on IT services businesses. We have increased our position in EPAM and our conviction in the future of the IT services space has led us to a new position in Endava (DAVA). Endava is a UK based company that, like EPAM, provides digital transformation consulting, agile software development and various automation solutions to clients all over the world.
EPAM Systems is a high quality IT service provider that has been a compounder stock. EPAM’s winning streak came to an end in 2022.
With Russia’s invasion of Ukraine the stock fell from $550 per share to $180 per share as the market was worried about EPAM’s workforce/delivery centers in Ukraine, Belarus and Russia. The management at EPAM did a wonderful job derisking the company from this exposure. They exited Russia by not only leaving their clients there but also by closing their delivery centers in the country. By the end of 2022, EPAM’s exposure to these volatile countries had reduced from 60% of overall workforce to 30% of overall workforce. EPAM moved some of the affected employees to neighboring countries and ramped up their hiring efforts in India and Latam. Due to this, the stock moved up to $450 per share a few months later in August 2022…” (Click here to read the full text)
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EPAM Systems, Inc. (NYSE:EPAM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held EPAM Systems, Inc. (NYSE:EPAM) at the end of first quarter which was 35 in the previous quarter.
We discussed EPAM Systems, Inc. (NYSE:EPAM) in another article and shared the list of worst-performing S&P 500 stocks in 2023. 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.
