Coho Partners, an investment advisory firm, released its second-quarter 2023 investor letter. A copy of the same can be downloaded here. So far, 2023 was one of the most challenging periods in the firm’s history. The fund had a fractional loss through the first six months of 2023 which compared poorly against the S&P 500 Index’s return of just under 17% and the Russell 1000 Value Index’s return of just over 5%. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Coho Partners Relative Value Equity Fund highlighted stocks like CVS Health Corporation (NYSE:CVS) in the second quarter 2023 investor letter. Headquartered in Woonsocket, Rhode Island, CVS Health Corporation (NYSE:CVS) is a health services provider that operates through Health Care Benefits, Pharmacy Services, and Retail/LTC segments. On July 20, 2023, CVS Health Corporation (NYSE:CVS) stock closed at $74.87 per share. One-month return of CVS Health Corporation (NYSE:CVS) was 7.57%, and its shares lost 20.40% of their value over the last 52 weeks. CVS Health Corporation (NYSE:CVS) has a market capitalization of $95.986 billion.
Coho Partners Relative Value Equity Fund made the following comment about CVS Health Corporation (NYSE:CVS) in its second quarter 2023 investor letter:
“In December of 2017, CVS Health Corporation (NYSE:CVS) agreed to buy Aetna, which broadened its offering by entering the managed care business. CVS has been moving its portfolio to a more value-based outcome model, and Aetna was a major move in that direction. We were willing to accept the leverage that came with the deal because CVS has a very cash generative model, and we anticipated the free cash flow would enable the company to de-lever fairly quickly.
By mid-2022, CVS was in a position to use the free cash flow that had been going to debt repayment to do bolt-on deals to further prepare for the value-based outcome model and/or return more cash to shareholders in the form of higher dividends or share repurchases. However, CVS lost a “star” in its largest Medicare plan in late 2022 and this will adversely impact earnings in 2024. This was a surprise and disappointment to us, but management should be able to regain the “star” in the back half of 2023, which will then give the company a nice tailwind in 2025…” (Click here to read the full text)
CVS Health Corporation (NYSE:CVS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 77 hedge fund portfolios held CVS Health Corporation (NYSE:CVS) at the end of first quarter which was 70 in the previous quarter.
We discussed CVS Health Corporation (NYSE:CVS) in another article and shared ClearBridge Value Equity Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q2 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.
