Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. 2025 got out to a solid start with the market hitting all-time highs in mid-February. However, a dramatic reversal pushed the S&P 500 down 8.7%, closing the quarter down 4.3%. During the quarter, the strategy returned -9.5% 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 contributed positively to the portfolio’s performance, which were partially offset by selection effects. In addition, you can check the fund’s top 5 holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Patient Capital Opportunity Equity Strategy highlighted stocks such as Royalty Pharma plc (NASDAQ:RPRX). Royalty Pharma plc (NASDAQ:RPRX) is a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry. The one-month return of Royalty Pharma plc (NASDAQ:RPRX) was 0.13%, and its shares gained 12.74% of their value over the last 52 weeks. On April 23, 2025, Royalty Pharma plc (NASDAQ:RPRX) stock closed at $31.69 per share with a market capitalization of $18.2 billion.
Patient Capital Opportunity Equity Strategy stated the following regarding Royalty Pharma plc (NASDAQ:RPRX) in its Q1 2025 investor letter:
“Royalty Pharma plc (NASDAQ:RPRX) was up nicely in the first quarter following the announced acquisition of its external manager. The market responded positively, pushing the stock up +23% as the new structure simplifies the business model and more closely aligns management with shareholders. We remain strong believers in the business and the high-quality management team running it. We view this as just another step in the company’s journey toward maximizing shareholder value. The company has an impressive track record, running the business for over 20 years as a private fund before bringing it public. The market opportunity for external royalty funding has only expanded as early-stage start-ups need capital and established players look to reduce debt levels. Royalty Pharma is ideally positioned as the partner of choice. The company maintains strong discipline, consistently achieving deal internal rate of returns (IRRs) in the low teens (unlevered). As they continue delivering results as a public company, we expect the market will increasingly take notice.”
A scientist in a laboratory looking through a microscope, surrounded by petri dishes and beakers while researching new biopharmaceutical advances.
Royalty Pharma plc (NASDAQ:RPRX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Royalty Pharma plc (NASDAQ:RPRX) at the end of the fourth quarter, compared to 33 in the third quarter. While we acknowledge the potential of Royalty Pharma plc (NASDAQ:RPRX) 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 covered Royalty Pharma plc (NASDAQ:RPRX) and shared the list of most undervalued healthcare stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 2025 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.