Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. During the quarter the strategy returned 17.6% net of fees compared to the S&P 500’s 11.7% return. The portfolio’s outperformance can be attributed to a three-factor model, where interaction, selection, and allocation effects all played a significant role. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Patient Capital Management featured stocks such as Illumina, Inc. (NASDAQ:ILMN) in the fourth quarter 2023 investor letter. Headquartered in San Diego, California, Illumina, Inc. (NASDAQ:ILMN) is a life science tools and integrated systems manufacturer. On January 29, 2024, Illumina, Inc. (NASDAQ:ILMN) stock closed at $146.72 per share. One-month return of Illumina, Inc. (NASDAQ:ILMN) was 6.62%, and its shares lost 31.50% of their value over the last 52 weeks. Illumina, Inc. (NASDAQ:ILMN) has a market capitalization of $23.299 billion.
Patient Capital Management stated the following regarding Illumina, Inc. (NASDAQ:ILMN) in its fourth quarter 2023 investor letter:
“We entered Illumina, Inc. (NASDAQ:ILMN), another healthcare name, in the quarter. A previous market darling, Illumina has declined from a high of $524 in 2021 to a low of $92 in 2023. We started adding near the lows. The company is a leader in genomic sequencing but made an ill-advised acquisition of Grail, a blood-based multi-cancer early detection product, in 2021 for $8 billion. The company completed the acquisition before European regulators could complete their antitrust review setting off years of regulatory back and forth. A new management team, new board members, an activist campaign, and an ordered divestiture of Grail later, and we believe we were able to buy a market-leading compounder at the point of maximum pessimism. Despite increased competition in the genome sequencing space, Illumina continues to be a leader with ~80% market share today. With the divestment of Grail, the company will return to a pure-play sequencing company with a drastically improved margin and FCF profile (22% operating margins core ILMN vs 8% with Grail) since Grail has been a cash drag of >$600m annually. Ex-Grail, we believed we were paying a market multiple on 2025 earnings for a market leader with strong cash generation and significant future growth potential.”
A biopharmaceutical research laboratory filled with scientists, illuminated by the glow of their equipment.
Illumina, Inc. (NASDAQ:ILMN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Illumina, Inc. (NASDAQ:ILMN) at the end of third quarter which was 43 in the previous quarter.
We discussed Illumina, Inc. (NASDAQ:ILMN) in another article and shared Polen Focus Growth Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q4 2023 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.
