Investment management company Cove Street Capital recently released its “Small Cap Value Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned -10.77% (net of fees) compared to -3.28% for the Russell 2000 Index and -3.64% for the Russell 2000 Value Index. For the first half of 2024, the S&P 500 is up 15%. Its biggest component, Nvidia, has increased by 150% over that time. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Cove Street Capital Small Cap Value Fund highlighted stocks like Clarivate Plc (NYSE:CLVT), in the second quarter 2024 investor letter. Clarivate Plc (NYSE:CLVT) is an information services provider. The one-month return of Clarivate Plc (NYSE:CLVT) was 2.81%, and its shares lost 44.55% of their value over the last 52 weeks. On July 10, 2024, Clarivate Plc (NYSE:CLVT) stock closed at $5.49 per share with a market capitalization of $3.669 billion.
Cove Street Capital Small Cap Value Fund stated the following regarding Clarivate Plc (NYSE:CLVT) in its Q2 2024 investor letter:
“We also added a position in Clarivate Plc (NYSE:CLVT), a data services provider that operates across academic research, intellectual property, and life sciences. We came to the investment from cross-work in another holding, Research Solutions (ticker: RSSS). Ultimately this company sucks in data from participants in the industry, aggregates it, and provides value added services and tools back to those industry participants. The power is in providing customers access to the aggregate. This was a private equity roll-up of a bunch of different data assets that paid too little attention to product innovation, leading to a period of stagnating growth and repeatedly missing guidance. The business of selling many tools and services on a pile of fixed cost assets (data) remains tremendous as can be seen by Clarivate’s mid-to-high 30% EBITDA margins and strong returns on invested capital. With new management and board members in place and 18 months of an “investment cycle” under their belt, we view the risk/reward of CLVT to be favorable at these levels, with a strong upside case if they can reinvigorate growth to their target levels.”
A state-of-the-art computer lab filled with engineers working on new analytics technologies.
Clarivate Plc (NYSE:CLVT) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held Clarivate Plc (NYSE:CLVT) at the end of the first quarter which was 33 in the previous quarter. Clarivate Plc (NYSE:CLVT) reported $621 million in revenue for the first quarter 2024, a $8 million decline compared to Q1 2023. While we acknowledge the potential of Clarivate Plc (NYSE:CLVT) 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.
We discussed Clarivate Plc (NYSE:CLVT) in another article and shared the list of best artificial intelligence stocks to buy under $10. 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.
