Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” first quarter 2024 investor letter. A copy of the same can be downloaded here. During the quarter the strategy returned 11.8% net of fees compared to the S&P 500’s 10.6% return. The outperformance of the portfolio can be attributed to selection and allocation effects, which are partially counteracted by interaction effects, according to a three-factor performance attribution model. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Patient Capital Opportunity Equity Strategy featured stocks like NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2024 investor letter. Headquartered in Santa Clara, California, NVIDIA Corporation (NASDAQ:NVDA) provides computer graphics and computing and networking solutions. On April 19, 2024, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $762.00 per share. One-month return of NVIDIA Corporation (NASDAQ:NVDA) was -19.79%, and its shares gained 181.78% of their value over the last 52 weeks. NVIDIA Corporation (NASDAQ:NVDA) has a market capitalization of $1.905 trillion.
Patient Capital Opportunity Equity Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its first quarter 2024 investor letter:
“This quarter we entered two new positions, while exiting four positions. Our first new position was NVIDIA Corporation (NASDAQ:NVDA), which we bought early in the quarter. Nvidia is the market leader in designing and selling Graphics Processing Units (GPU), which has recently benefited from the insatiable demand of artificial intelligence (AI) models. The company currently captures 92% market share of data center GPUs and grew revenue, earnings and FCF an astounding 126%, 392%, and 610%, respectively, over the last year. While much of the focus is on Nvidia’s market cap reaching $2.3T, up 230% over the last year, the company’s valuation has actually come down over that period. As of 3/31/23, consensus was valuing the company at 61x forward EPS. This compares to today, where the company is being valued at 37x. While yes, we have never seen a company expand their market cap by so much so quickly, we have also never seen a company grow their fundamental earnings and cash generation so quickly (and which is actually expanding faster than valuation). While competitors are working to enter the GPU space, Nvidia has created a moat around their GPUs with their CUDA software offering. While we do expect the large cloud players to continue to move into the market, we think NVDA can continue to demand top market share. With leading edge technology, an increasing innovation cycle and strong cash generation, the company is well positioned for the increased adoption of accelerated computing and artificial intelligence (AI).
Nvidia Corp. (NVDA) was a top performer in the quarter gaining 82.5% in the period. While the company has had an impressive run, gaining 242% over the last year, the valuation has been supported by the impressive growth in Revenue (126%), EPS (392%) and free cash flow (610%) over the last year. The company has solidified its position in the GPU space supported by its proprietary software CUDA. While we expect competition to increase, we think NVDA can continue to maintain top market share. With leading edge technology, an increasing innovation cycle and strong cash generation, the company is well positioned for the increased adoption of artificial intelligence (AI).”
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA) is in fifth position on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, NVIDIA Corporation (NASDAQ:NVDA) was held by 173 hedge fund portfolios, down from 180 in the previous quarter, according to our database.
We previously discussed NVIDIA Corporation (NASDAQ:NVDA) in another article, where we shared Ithaka US Growth Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q1 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.
