Polen Capital, an investment management company, released its “Polen U.S. Small Company Growth Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund delivered -8.55% gross and -8.67% net of fees compared to a -2.92% return for the Russell 2000 Growth Index and a -1.41% return for the S&P SmallCap 600 Growth Index. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Polen U.S. Small Company Growth Strategy highlighted stocks like Option Care Health, Inc. (NASDAQ:OPCH) in its Q2 2024 investor letter. Option Care Health, Inc. (NASDAQ:OPCH) provides home and alternate site infusion services. The one-month return of Option Care Health, Inc. (NASDAQ:OPCH) was 10.13%, and its shares lost 11.66% of their value over the last 52 weeks. On July 31, 2024, Option Care Health, Inc. (NASDAQ:OPCH) stock closed at $29.69 per share with a market capitalization of $5.161 billion.
Polen U.S. Small Company Growth Strategy stated the following regarding Option Care Health, Inc. (NASDAQ:OPCH) in its Q2 2024 investor letter:
“We initiated a new position in Option Care Health, Inc. (NASDAQ:OPCH), a healthcare company that provides home and center-based infusions. Most infusions are hospital-based, with home infusions making up only 15% of the market; however, this part of the market is growing and expected to expand further as home and suite-based infusions take significant costs out of the healthcare system. Option Care is the number one player in home infusions by a sizable margin. The company has been significantly expanding margins as it scales, with 90% of the payer mix commercial and only 10% fee-for-service Medicare and Medicaid (carrying the highest reimbursement risk). We believe revenue will continue growing at a low-teens rate, with margins expanding with scale. Optically, Option Care’s returns on capital appear low due to amortization associated with the reverse merger it completed with Bio Script in 2019. However, tangible return on invested capitals is over 50%. Overall, we anticipate above-average compounding.”
A home infusion nurse in full PPE gown delivering treatments to a patient in their own home.
Option Care Health, Inc. (NASDAQ:OPCH) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Option Care Health, Inc. (NASDAQ:OPCH) at the end of the first quarter which was 35 in the previous quarter. The commitment of the more than 7,500 team members to providing unmatched patient care and figuring out how to serve more patients is demonstrated by Option Care Health, Inc.’s (NASDAQ:OPCH) revenue growth of more than 12% in the first quarter. While we acknowledge the potential of Option Care Health, Inc. (NASDAQ:OPCH) 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 Option Care Health, Inc. (NASDAQ:OPCH) and shared Madison Small 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.
