SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” second quarter 2024 investor letter. A copy of the same can be downloaded here. In the second quarter, the strategy lost -3.55% on a gross basis (-3.69% net) compared to a -3.28% return for the Russell 2000 Index and -3.64% for the Russell 2000 Value Index. The strategy returned 4.61% on a gross basis (3.88% net) for the trailing twelve months compared to 10.06% and 10.90% respectively for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2024.

SouthernSun Small Cap Strategy highlighted stocks like U.S. Physical Therapy, Inc. (NYSE:USPH), in the second quarter 2024 investor letter. U.S. Physical Therapy, Inc. (NYSE:USPH) is an outpatient physical therapy clinics operator. The one-month return of U.S. Physical Therapy, Inc. (NYSE:USPH) was 3.60%, and its shares lost 18.52% of their value over the last 52 weeks. On July 31, 2024, U.S. Physical Therapy, Inc. (NYSE:USPH) stock closed at $97.50 per share with a market capitalization of $1.452 billion.

SouthernSun Small Cap Strategy stated the following regarding U.S. Physical Therapy, Inc. (NYSE:USPH) in its Q2 2024 investor letter:

“U.S. Physical Therapy, Inc. (NYSE:USPH) was one of the top detractors in the Small Cap strategy in the second quarter. The company is a national operator of outpatient physical therapy clinics and a provider of industrial injury prevention services. Founded in 1990, they operate 683 outpatient physical therapy clinics in 43 states. Adjusted EBITDA was down in the most recent quarter due to lower reimbursements from Medicare, which represents approximately 30% of their revenue base. However, the company continues to offset the lower Medicare reimbursements with positive negotiations with commercial insurance payers, and they continue to make bolt-on acquisitions for new clinics and their industrial injury prevention business. We continue to have confidence in the management team and the long-term prospects for growth and improving financial performance in the business.”

A healthcare professional providing physical therapy to an elderly patient.

U.S. Physical Therapy, Inc. (NYSE:USPH) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held U.S. Physical Therapy, Inc. (NYSE:USPH) at the end of the first quarter which was 8 in the previous quarter. While we acknowledge the potential of U.S. Physical Therapy, Inc. (NYSE:USPH) 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 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.