Minot Light Capital, an investment management firm, recently released its fourth-quarter 2024 investor letter. A copy of the same can be downloaded here. This is the first partner update of Minot Light Capital after the fund’s launch on October 1, 2024. The partnership gained 6.9% gross/5.2% net in the quarter versus 2.4% for the S&P 500 total return index and 0.3% for the Russell 2000. The firm is pleased to see positive relative performance of the fund in both up and down markets over the market’s turbulent quarter. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Minot Light Capital highlighted stocks like Journey Medical Corporation (NASDAQ:DERM), in the fourth quarter 2024 investor letter. Journey Medical Corporation (NASDAQ:DERM) specializes on the development and commercialization of pharmaceutical products for the treatment of dermatological conditions. The one-month return of Journey Medical Corporation (NASDAQ:DERM) was -7.67%, and its shares lost 23.61% of their value over the last 52 weeks. On January 23, 2024, Journey Medical Corporation (NASDAQ:DERM) stock closed at $3.85 per share with a market capitalization of $80.426 million.
Minot Light Capital stated the following regarding Journey Medical Corporation (NASDAQ:DERM) in its Q4 2024 investor letter:
“Journey Medical Corporation (NASDAQ:DERM) is the partnership’s third largest position and was also our largest performance detractor in 4Q24. Similar to MYTE, we believe DERM offers a very attractive risk/reward opportunity to our investors. Journey Medical is a specialty pharmaceutical company focused on the dermatology space. The company’s CEO along with many members of management and its salesforce came from Medicis, which was a pioneer in the specialty pharmaceutical industry and was also focused on the dermatology space. Journey currently has a relatively small portfolio of drugs that generate about $55mm-$60mm in sales. It also has a fully built-out salesforce that covers the vast majority of relevant dermatology call points. It has achieved cashflow breakeven at the current revenue level with this sales and marketing infrastructure.
What makes DERM an exciting stock, in our opinion, is the approval it received from FDA on Nov 1, 2024 for a product called Emrosi for the treatment of Rosacea. In its pivotal clinical trial, Emrosi demonstrated head-to-head superiority over Oracea, which the current oral standard of care in the United States for Rosacea. Oracea is currently doing about $300mm of sales in the US. We believe that with superior data and a strong commercial organization, Journey should be able to take at least half of this market over time, leading to sales of $150-$200mm. Importantly, this product should carry a gross margin of at least 70% and Journey does not have to add a single salesperson to begin marketing the product in mid-2025, as it already covers over 90% of the potential prescribers. Hence, it is our opinion that the launch of Emrosi should drive a massive increase in earnings and free cash flow for Journey Medical beginning in the second half of 2025…” (Click here to read the full text)
A scientist in the lab, researching the development of biopharmaceutical monoclonal antibody drugs.
Journey Medical Corporation (NASDAQ:DERM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 1 hedge fund portfolios held Journey Medical Corporation (NASDAQ:DERM) at the end of the third quarter which was 3 in the previous quarter. While we acknowledge the potential of Journey Medical Corporation (NASDAQ:DERM) 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 addition, please check out our hedge fund investor letters Q3 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.