Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” third quarter 2023 investor letter. A copy of the same can be downloaded here. During the quarter the strategy returned -6.0% net of fees compared to the S&P 500’s -3.3% return. As the quarter demonstrated, the markets are uncertain. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Patient Capital Management highlighted stocks like Citigroup Inc. (NYSE:C) in the third quarter 2023 investor letter. Headquartered in New York, New York, Citigroup Inc. (NYSE:C) is a diversified financial service holding company. On November 1, 2023, Citigroup Inc. (NYSE:C) stock closed at $39.60 per share. One-month return of Citigroup Inc. (NYSE:C) was 2.22%, and its shares lost 8.56% of their value over the last 52 weeks. Citigroup Inc. (NYSE:C) has a market capitalization of $78.039 billion.
Patient Capital Management made the following comment about Citigroup Inc. (NYSE:C) in its Q3 2023 investor letter:
“Many investors focus on short-term results. Mutual funds hold stocks less than a year on average. Hedge funds are assessed on monthly performance. Algorithmic funds optimize for holding periods as short as minutes. These investors don’t look through short term weakness with an eye to long-term gain.
Citigroup Inc. (NYSE:C), which we’ve been adding to, exemplifies the point. The cash-on-cash returns we see are eye-popping. At $39.81 4 , its dividend yield is 5.3% and its total owners’ yield (dividend yield + decline in shares outstanding over past year) is 5.9%. The dividend yield is greater than treasuries or money markets. Citigroup trades at the lowest price-to-tangible book value of the post-Financial Crisis era (see Exhibit A). Even lower than the 2011 Eurozone debt crisis when it still held many problematic assets. Importantly, the balance sheet is now in great shape with no evident issues.
Recent return on tangible equity ticked down as the company deals with duplicative costs to improve its technology and risk controls. Yet the return doesn’t materially differ from the post-financial crisis period when the stock traded at nearly double the tangible book multiple. If it trades back to the median multiple over the next 5 years, that implies 18% annual returns including the dividend…” (Click here to read the full text)
Citigroup Inc. (NYSE:C) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 75 hedge fund portfolios held Citigroup Inc. (NYSE:C) at the end of second quarter which was 79 in the previous quarter.
We discussed Citigroup Inc. (NYSE:C) in another article and shared best Warren Buffett stock picks for beginners. In addition, please check out our hedge fund investor letters Q3 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.
