Here’s Why Madison Funds Believes that Model N (MODN) is a Good Investment

Madison Funds, advised by Madison Asset Management, LLC, released its “Madison Small Cap Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. During the quarter, the fund declined 18.5% compared to a decline of 17.2% for the Russell 2000 benchmark. The fund’s underperformance was driven by stock selection. In addition, you can check the top 5 holdings of the fund to learn about its best picks in 2022.

Madison Funds discussed stocks like Model N, Inc. (NYSE:MODN)  in the second quarter investor letter. Headquartered in San Mateo, California, Model N, Inc. (NYSE:MODN) is a software company. On September 22, 2022, Model N, Inc. (NYSE:MODN) stock closed at $32.30 per share. One-month return of Model N, Inc. (NYSE:MODN) was 8.61% and its shares lost 5.39% of their value over the last 52 weeks. Model N, Inc. (NYSE:MODN)  has a market capitalization of $1.196 billion.

Here is what Madison Funds specifically said about Model N, Inc. (NYSE:MODN)  in its Q2 2022 investor letter:

“On the flip side, the broad selloff has created many opportunities in high quality franchises and we believe both Model N, Inc. (NYSE:MODN) and XMTR offer unique technology solutions with idiosyncratic growth opportunities that should prove rather resilient in a difficult economy. Here, we will take a moment to discuss why we believe MODN is a good investment in these turbulent economic waters.

Model N is a vertical SaaS (software-as-a-service) software company focusing largely on the Life Sciences end market. Their industry solutions include revenue management software for pharmaceutical and medical device makers which are considered the system of record for their customers. Historically mission-critical investment spending in this end market has held up well in difficult economic conditions, but what makes MODN especially appealing is the dearth of any real direct competition. The general selloff has been most acute in the software space and MODN has been punished despite resilient fundamentals and a solidly profitable business. We believe there are real fundamental catalysts that will bolster their business even in a recessionary scenario.”

Photo by Danial Igdery on Unsplash

Model N, Inc. (NYSE:MODN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held Model N, Inc. (NYSE:MODN) at the end of the second quarter which was 14 in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.

Disclosure: None. This article is originally published at Insider Monkey.