Saga Partners, an investment management firm, published its second-quarter 2022investor letter – a copy of which can be seen here. During the second quarter of 2022, the Saga Portfolio (“the Portfolio”) declined 56.3% net of fees. This compares to the overall decrease for the S&P 500 Index, including dividends, of 16.1%. The cumulative return since inception on January 1, 2017, for the Saga Portfolio, is -7.3% net of fees compared to the S&P 500 Index of 86.8%. The annualized return since inception for the Saga Portfolio is -1.4% net of fees compared to the S&P 500’s 12.0%. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Saga Partners mentioned Trupanion, Inc.(NYSE:TRUP) and explained its insights for the company. Founded in 1999, Trupanion, Inc.(NYSE:TRUP) is a Seattle, Washington-based pet insurance company with a $2.9 billion market capitalization. Trupanion, Inc.(NYSE:TRUP) delivered a -44.41% return since the beginning of the year, while its 12-month returns are down by -11.52%. The stock closed at $73.40 per share on September 12, 2022.
Here is what Saga Partners has to say about Trupanion, Inc.(NYSE:TRUP) in its Q2 2022 investor letter:
“The Portfolio first bought Trupanion during Q3’18. Trupanion provides pet insurance to help owners budget for vet expenses if their pet needs care. While pet insurance has historically been a bad product with confusing, if not misleading, coverage that left pet owners and veterinarians distrustful of pet insurance, Trupanion simplified the product by providing comprehensive coverage and increased transparency to help customers and vets understand the value proposition.
Trupanion’s competitive advantage primarily comes from being a low-cost provider. It integrates all the parts of the value chain that matter which creates efficiencies and a better customer experience. Unlike most competitors, Trupanion underwrites its own policies and doesn’t reinsure their policies. They have their own call centers, a national salesforce of Territory Partners, and process their own claims. The combination of these efforts reduces operating costs by ~20% relative to peers. These savings are used to offer customers higher payout ratios (~70% of premiums earned are paid out in vet claims) compared to an average of 50% for peers. This naturally attracts more customers over time which helps Trupanion scale operating costs further, which can further be share with customers. Other factors like the relationships that Territory Partners have with vets and hospitals, which typically take 2-3 years to build through repeated visits and its integrated automated claims software called Trupanion Express all feed into building its durable competitive advantage…” (Click here to see the full text)
Photo by Karlo Tottoc on Unsplash
Our calculations show that Trupanion, Inc.(NYSE:TRUP) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Trupanion, Inc.(NYSE:TRUP) was in 14 hedge fund portfolios at the end of the second quarter of 2022, compared to 18 funds in the previous quarter. Trupanion, Inc.(NYSE:TRUP) delivered a 42.19% return in the past 3 months.
In August 2020, we also shared another hedge fund’s views on Trupanion, Inc.(NYSE:TRUP) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
