Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. During the quarter, the strategy returned -1.9% net of fees compared to the S&P 500’s 4.3% return. According to a three-factor performance attribution model, allocation and interaction effects led to the portfolio’s underperformance which was partially offset by selection effects. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Patient Capital Opportunity Equity Strategy highlighted stocks like Illumina, Inc. (NASDAQ:ILMN) in the second quarter 2024 investor letter. Illumina, Inc. (NASDAQ:ILMN) offers sequencing- and array-based solutions for genetic and genomic analysis. The one-month return of Illumina, Inc. (NASDAQ:ILMN) was 9.39%, and its shares lost 37.78% of their value over the last 52 weeks. On July 23, 2024, Illumina, Inc. (NASDAQ:ILMN) stock closed at $115.60 per share with a market capitalization of $18.415 billion.
Patient Capital Opportunity Equity Strategy stated the following regarding Illumina, Inc. (NASDAQ:ILMN) in its Q2 2024 investor letter:
“Illumina, Inc. (NASDAQ:ILMN) is a good example. We entered the name late last year as the company began to trade at a 5-yr low. The company is a leader in the genomic sequencing space but made an ill-advised acquisition of Grail, a blood-based multi-cancer early detection product, in 2021 for $8B dollars. Grail was an annual ~$600m drag on profitability hitting the financials at the same time that competition began to pick up and the overall demand environment began to weaken. Despite increased competition in the genome sequencing space, Illumina continues to be a leader with ~80% market share today. With the successful separation of Grail Inc. (GRAL) in June, Illumina has now returned to a pure-play sequencing company. As the company returns to historical profitability post Grail spin-off and as the demand environment normalizes post COVID, we believe you can buy a market leader in a secularly growing industry for less than a market multiple.”
A research facility with medical professionals surrounded by diagnostic equipment.
Illumina, Inc. (NASDAQ:ILMN) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held Illumina, Inc. (NASDAQ:ILMN) at the end of the first quarter which was 58 in the previous quarter. Illumina, Inc. (NASDAQ:ILMN) reported consolidated revenue of $1.08 billion in the first quarter, down 1% year-over-year. While we acknowledge the potential of Illumina, Inc. (NASDAQ:ILMN) 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 Illumina, Inc. (NASDAQ:ILMN) and shared Ensemble Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q2 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.
