Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. During the quarter, the significant market influences were the U.S. election results, inflation, and the direction of interest rates. Against this backdrop, the fund returned 1.70% (net) during the quarter outperforming the 0.62% returns of the Russell 2500 Index and -0.26% returns of the secondary benchmark the Russell 2500 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Meridian Contrarian Fund emphasized stocks such as Tenet Healthcare Corporation (NYSE:THC). Tenet Healthcare Corporation (NYSE:THC) is a diversified healthcare services company headquartered in Dallas, Texas. The one-month return of Tenet Healthcare Corporation (NYSE:THC) was 1.22%, and its shares gained 47.89% of their value over the last 52 weeks. On February 20, 2025, Tenet Healthcare Corporation (NYSE:THC) stock closed at $137.24 per share with a market capitalization of $13.054 million.
Meridian Contrarian Fund stated the following regarding Tenet Healthcare Corporation (NYSE:THC) in its Q4 2024 investor letter:
“Tenet Healthcare Corporation (NYSE:THC) is one of the top ten U.S. operators of hospitals, outpatient surgery centers, and healthcare business process services. We initiated our position in late 2022, believing that the market’s short-term focus on COVID related staffing and admissions challenges overshadowed the value of Tenet’s long-term strategy of growing outpatient surgery centers. Tenet’s execution in 2024 has been very strong, guided by consistent patient growth and the accelerated shift to outpatient surgery following its hospital divestitures. However, the stock experienced a sell-off during the quarter, driven by market concerns over new administration policies and weaker hospital admissions data from the late flu season. We view the sell-off as another example of market overreaction to near-term headlines overshadowing the company’s long-term value creation strategy. In terms of position management, we had reduced our holding by nearly one-third prior to the sell-off on expectations that earnings growth—while still robust—would decelerate into 2025. As of period end, we see the valuation as compelling to hold given the long-term growth strategy in outpatient services—an area not likely to be affected by new administration policies.”
A room full of medical personnel collaborating on a treatment plan for a patient.
Tenet Healthcare Corporation (NYSE:THC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 65 hedge fund portfolios held Tenet Healthcare Corporation (NYSE:THC) at the end of the fourth quarter compared to 66 in the third quarter. While we acknowledge the potential of Tenet Healthcare Corporation (NYSE:THC) 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 Tenet Healthcare Corporation (NYSE:THC) and shared the list of non-tech AI opportunities amid DeepSeek selloff. In addition, please check out our hedge fund investor letters Q4 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.