Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. During the quarter the strategy returned 17.6% net of fees compared to the S&P 500’s 11.7% return. The portfolio’s outperformance can be attributed to a three-factor model, where interaction, selection, and allocation effects all played a significant role. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Patient Capital Management featured stocks such as Crocs, Inc. (NASDAQ:CROX) in the fourth quarter 2023 investor letter. Headquartered in Broomfield, Colorado, Crocs, Inc. (NASDAQ:CROX) engages in the footwear and accessories business. On January 29, 2024, Crocs, Inc. (NASDAQ:CROX) stock closed at $104.40 per share. One-month return of Crocs, Inc. (NASDAQ:CROX) was 11.34%, and its shares lost 14.26% of their value over the last 52 weeks. Crocs, Inc. (NASDAQ:CROX) has a market capitalization of $6.323 billion.
Patient Capital Management stated the following regarding Crocs, Inc. (NASDAQ:CROX) in its fourth quarter 2023 investor letter:
“This quarter we entered four new positions, while exiting four positions. Our largest new position was Crocs, Inc. (NASDAQ:CROX). Crocs is a well-known consumer brand in the footwear industry. Despite continual calls over the years as a fad, Crocs has shown impressive growth and staying power. Since 2017 the company has increased sales at a 20%compound annual growth rate (CAGR) while maintaining industry leading operating margins of 27%. The stock sold off recently as the HEYDUDE brand it purchased in 2022 faced challenges. A combination of market oversaturation, and still limited brand awareness has made HEYDUDE a drag on the overall business. This is more than priced in at current levels with the stock trading at a P/E of 8.5x below peers at 14.3x and their historical average of 15x since 2019. The company is making progress on fixing HEYDUDE with growth expected to return in the 2H24. Overall, we view the child piece of the core Crocs product as a consumer staple and believe people are underappreciating its staying power as well as the ongoing improvements in the HEYDUDE brand. We believe you can buy a high-quality company, at a low multiple, with top FCF yield (13%) that is committed to both debt paydown and buybacks.”
A busy retail store full of customers trying on a wide range of footwear.
Crocs, Inc. (NASDAQ:CROX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held Crocs, Inc. (NASDAQ:CROX) at the end of third quarter which was 45 in the previous quarter.
We discussed Crocs, Inc. (NASDAQ:CROX) in another article and shared the list of quality undervalued non-cyclical stocks to buy. In addition, please check out our hedge fund investor letters Q4 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.
