Investment management company Bireme Capital recently released its fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. In 2023, the fund returned 21.3% net of fees underperforming the S&P 500’s 26.2%. The fund was up 448% net since inception in 2016 vs the S&P at 161%, an annual outperformance of 11.7%. Last year was the second calendar year in a row that the fund underperformed the S&P 500, and the first since 2019. Nonetheless, the firm is particularly proud of last year’s returns because 2023 was an extraordinarily tough year for the relative performance of active value managers. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Bireme Capital featured stocks such as Arm Holdings plc (NASDAQ:ARM) in the fourth quarter 2023 investor letter. Headquartered in Cambridge, the United Kingdom, Arm Holdings plc (NASDAQ:ARM) provides semiconductor technology. On February 6, 2024, Arm Holdings plc (NASDAQ:ARM) stock closed at $72.98 per share. One-month return of Arm Holdings plc (NASDAQ:ARM) was 3.12%, and YTD its shares lost 2.88% of their value. Arm Holdings plc (NASDAQ:ARM) has a market capitalization of $74.821 billion.
Bireme Capital stated the following regarding Arm Holdings plc (NASDAQ:ARM) in its fourth quarter 2023 investor letter:
“Another stock we bet against in the second half of 2023 was Arm Holdings plc (NASDAQ:ARM). We find the valuation to be far too rich at more than 20x sales and 100x FY 2023 operating income. To garner such a large multiple in the public markets, majority owner Softbank seems to have pulled out all the short-term levers at its disposal. From the FT:
Arm is seeking to raise prices for its chip designs as the SoftBank-owned group aims to boost revenues ahead of a hotly anticipated initial public offering in New York this year. The UK-based group, which designs blueprints for semiconductors found in more than 95 per cent of all smartphones, has recently informed several of its biggest customers of a radical shift to its business model, according to several industry executives and former employees. These people said Arm planned to stop charging chipmakers royalties for using its designs based on a chip’s value and instead charge device makers based on the value of the device. This should mean the company earns several times more for each design it sells, as the average smartphone is vastly more expensive than a chip…” (Click here to read the full text)
A technician working on power management in a semiconductor factory.
Arm Holdings plc (NASDAQ:ARM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Arm Holdings plc (NASDAQ:ARM) at the end of third quarter which was 0 in the previous quarter. In addition, please check out our hedge fund investor letters Q4 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.