Headwaters Capital Management, an investment management company, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned -6.6% (gross) and -6.8% (net) in the fourth quarter compared to a 0.6% return for the Russell Mid Cap Index. For the full year the portfolio returned +14.0% (+13.1% net) compared to a +15.3% return for the index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Headwaters Capital Management highlighted stocks like TransMedics Group, Inc. (NASDAQ:TMDX) in the Q4 2024 investor letter. TransMedics Group, Inc. (NASDAQ:TMDX) is a commercial-stage medical technology company. The one-month return of TransMedics Group, Inc. (NASDAQ:TMDX) was -4.15%, and its shares lost 27.72% of their value over the last 52 weeks. On January 16, 2025, TransMedics Group, Inc. (NASDAQ:TMDX) stock closed at $58.02 per share with a market capitalization of $51.947 billion.
Headwaters Capital Management stated the following regarding TransMedics Group, Inc. (NASDAQ:TMDX) in its Q4 2024 investor letter:
“Top Detractor: TransMedics Group, Inc. (NASDAQ:TMDX) -60%. I should probably just leave TMDX as a placeholder in the contributor/detractor section. TMDX was the top contributor in Q2 (and I trimmed the position at that time given stretched valuation). Fast forward to Q4 and the narrative around this company has completely changed. Investors grew concerned that the company has reached market saturation for its organ transplant device given that market share gains began to moderate. In addition, clinical trials from competitive technologies drove concerns about future competitive threats. On the market saturation point, I continue to believe that the utility of TMDX’s device combined with the efficiencies enabled by its logistics network will drive ongoing transplant center adoption. Additionally, concerns around competitive threats are likely overblown given that FDA approval of any potential device is years away. At that point, TMDX’s market dominance and ongoing product innovation will make it difficult for new entrants to displace TMDX.”
A surgeon in a modern operating theatre performing a transplant surgery with medical technology.
TransMedics Group, Inc. (NASDAQ:TMDX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held TransMedics Group, Inc. (NASDAQ:TMDX) at the end of the third quarter which was 29 in the previous quarter. In the third quarter TransMedics Group, Inc. (NASDAQ:TMDX) generated $108.8 million in revenues, representing 64% growth from 3Q 2023. While we acknowledge the potential of TransMedics Group, Inc. (NASDAQ:TMDX) 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 TransMedics Group, Inc. (NASDAQ:TMDX) and shared the list of stocks Jim Cramer recently discussed. 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.