Here’s Why MultiPlan Corporation (MPLN) Declined in Q3

Diamond Hill Capital, an investment management company, released its “Long-Short Fund” third-quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the strategy returned -5.25% compared to a -4.61% return for the Russell 1000 Index. Even though the fund’s short book trailed the Russell 1000 Index, it still added positive returns. On the other hand, weakness in consumer discretionary and communication services holdings dragged the performance of the long book of the fund in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Diamond Hill Capital highlighted stocks like MultiPlan Corporation (NYSE:MPLN) in its Q3 2022 investor letter. Headquartered in New York, New York, MultiPlan Corporation (NYSE:MPLN) is an analytics-based service provider to the healthcare industry. On November 29, 2022, MultiPlan Corporation (NYSE:MPLN) stock closed at $1.4900 per share. One-month return of MultiPlan Corporation (NYSE:MPLN) was -40.64%, and its shares lost 62.37% of their value over the last 52 weeks. MultiPlan Corporation (NYSE:MPLN) has a market capitalization of $952.293 million.

Diamond Hill Capital made the following comment about MultiPlan Corporation (NYSE:MPLN) in its Q3 2022 investor letter:

“On an individual holdings’ basis, top contributors to return in Q3 included short positions in MultiPlan Corporation (NYSE:MPLN), WD-40 Company and United Parcel Service (UPS). MultiPlan is a healthcare services business providing out-of-network cost management solutions to healthcare payors. In our view, MultiPlan was a compelling short opportunity due to a combination of a high valuation and several fundamental risk factors, including a high degree of customer concentration, rising regulatory risk and high leverage limiting its ability to seek strategic alternatives. In Q3, its share price reacted negatively after disclosing that one of its largest customers was renewing its contract on terms less favorable for MultiPlan — which was in line with our thesis. With the share price subsequently trading below our estimate of intrinsic value, we chose to cover the short position.”

Stokkete/Shutterstock.com

MultiPlan Corporation (NYSE:MPLN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held MultiPlan Corporation (NYSE:MPLN) at the end of the third quarter, which was 23 in the previous quarter.

We discussed MultiPlan Corporation (NYSE:MPLN) in another article and shared the best medical stocks under $10. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.

Suggested Articles:

• 11 Biggest Malls in Europe
• 10 Best 5% Dividend Stocks To Buy
• Louis Navellier Stock Portfolio

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