Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” first quarter 2024 investor letter. A copy of the same can be downloaded here. Strong economic signals and a positive inflation report lifted the market rally during the first quarter. The fund returned 6.25% during the quarter underperforming the 6.92% return of the Russell 2500 Index. However, the fund outperformed the 6.07% returns of the secondary benchmark the Russell 2500 Value Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Meridian Contrarian Fund highlighted stocks like Tenet Healthcare Corporation (NYSE:THC) in the first quarter 2024 investor letter. Tenet Healthcare Corporation (NYSE:THC) is a diversified healthcare services company headquartered in Dallas, Texas. The one-month return of Tenet Healthcare Corporation (NYSE:THC) was 2.38%, and its shares gained 70.76% of their value over the last 52 weeks. On June 21, 2024, Tenet Healthcare Corporation (NYSE:THC) stock closed at $134.25 per share with a market capitalization of $13.114 billion.
Meridian Contrarian Fund stated the following regarding Tenet Healthcare Corporation (NYSE:THC) in its first quarter 2024 investor letter:
“Tenet Healthcare Corporation (NYSE:THC) is a top-ten U.S. operator of hospitals, outpatient surgery centers, and healthcare business process services. We initiated our position in late 2022 as we believed that the market’s short-term focus on COVID-caused staffing and admissions challenges overshadowed the value of Tenet’s long-term strategy of growing outpatient surgery centers. Outpatient surgery provides a cost-effective and patient-centered level of care that patients prefer and a Caroline business model that drives significantly higher returns to Tenet above that of the legacy hospital model. Tenet surged nearly 40% in the first quarter as the company executed nine hospital sales at valuations above where the stock trades. These divestitures drive three improvements to incremental return on equity by allowing Tenet to reduce debt, accelerate the corporate shift to higher-returning outpatient surgery centers, and free more capital to be returned to shareholders via stock buybacks. While the divestitures temporarily depress Tenet’s earnings growth, it accelerates our core thesis. We remain optimistic about the company’s newfound capital flexibility, and during the quarter we maintained our holding in Tenet.”
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Tenet Healthcare Corporation (NYSE:THC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held Tenet Healthcare Corporation (NYSE:THC) at the end of the first quarter which was 68 in the previous quarter. In the first quarter, Tenet Healthcare Corporation (NYSE:THC) generated total net operating revenues of $5.4 billion and consolidated adjusted EBITDA of $1.02 billion, up 23% compared to first quarter 2023. While we acknowledge the potential of Tenet Healthcare Corporation (NYSE:THC) 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.
We discussed Tenet Healthcare Corporation (NYSE:THC) in another article and shared Greenlight Capital’s views on the company. In addition, please check out our hedge fund investor letters Q1 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.
