Brown Capital Management, an investment management company, released its “The Brown Capital Management Small Company Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The Small Company Fund returned -6.57%, underperforming the Russell 2000 Growth index’s 2.92% decline. Fundamental and macroeconomic factors drove the underperformance of the fund in the quarter. The fund aims to identify and invest in Exceptional Growth Companies (EGCs) that focus on products and services their customers cannot live without. In addition, check the fund’s top five holdings to know its best picks in 2024.
Brown Capital Management Small Company Fund highlighted stocks like Repligen Corporation (NASDAQ:RGEN) in the second quarter 2024 investor letter. Repligen Corporation (NASDAQ:RGEN) develops and distributes bioprocessing technologies and systems. The one-month return of Repligen Corporation (NASDAQ:RGEN) was -10.95%, and its shares lost 8.89% of their value over the last 52 weeks. On September 6, 2024, Repligen Corporation (NASDAQ:RGEN) stock closed at $147.07 per share with a market capitalization of $8.237 billion.
Brown Capital Management Small Company Fund stated the following regarding Repligen Corporation (NASDAQ:RGEN) in its Q2 2024 investor letter:
“Repligen Corporation (NASDAQ:RGEN) is a life-sciences company that develops and manufactures products used throughout the complex process of making biological drugs, helping its customers increase efficiency and reduce costs. In May 2024, the company reported first quarter revenue above expectations but profitability below expectations. Revenue declined 17% during the first quarter of 2024, following a 20% decline in 2023. Base business ex-COVID was down 9% in 2023, and COVID revenue now is less than 5% of total revenue, so COVID runoff should have minimal impact on revenue growth going forward. Management pointed to continued weakness among Contract Development and Manufacturing Organization (CDMO) customers as the pace of R&D investments among smaller bio-techs has slowed. That is a result of the tougher funding environment for smaller biotechs due to higher interest rates. As mentioned above, we believe this is an industry-wide phenomenon, and not specific to Repligen. Several other industry participants have reported a similar environment. These include Thermo Fisher Scientific, Danaher and large CDMOs like Catalent and Lonza, supporting our view of an industry-wide headwind.
In June, Repligen announced a CEO transition, which also contributed to the stock price’s 32% decline during the quarter. The company’s highly respected CEO, Tony Hunt, will be stepping down and handing the reins to current President and Chief Commercial Officer Olivier Loeillot. This has been a well-planned transition with Olivier being brought on as CCO in October 2023 as a successor to Tony. The company believes demand is close to a bottom and now is a good time for the CEO transition to occur. We remain confident that Repligen is well positioned as an innovator in the large bioprocessing market, and we believe the share price decline gives us a good buying opportunity.”
A technician in a lab inspecting an ELISA test kit for use in biopharmaceutical diagnostics.
Repligen Corporation (NASDAQ:RGEN) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Repligen Corporation (NASDAQ:RGEN) at the end of the second quarter which was 32 in the previous quarter. Repligen Corporation (NASDAQ:RGEN) reported $154 million in revenues in the second quarter, a decline of 3% year-over-year. While we acknowledge the potential of Repligen Corporation (NASDAQ:RGEN) 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 Repligen Corporation (NASDAQ:RGEN) and shared Parnassus Mid Cap Fund ‘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.
