Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. During the quarter, the strategy returned -1.9% net of fees compared to the S&P 500’s 4.3% return. According to a three-factor performance attribution model, allocation and interaction effects led to the portfolio’s underperformance which was partially offset by selection effects. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Patient Capital Opportunity Equity Strategy highlighted stocks like CVS Health Corporation (NYSE:CVS), in the second quarter 2024 investor letter. CVS Health Corporation (NYSE:CVS) is a US-based health solutions provider. The one-month return of CVS Health Corporation (NYSE:CVS) was -4.82%, and its shares lost 23.16% of their value over the last 52 weeks. On July 23, 2024, CVS Health Corporation (NYSE:CVS) stock closed at $57.97 per share with a market capitalization of $72.506 billion.
Patient Capital Opportunity Equity Strategy stated the following regarding CVS Health Corporation (NYSE:CVS) in its Q2 2024 investor letter:
“CVS Health Corporation (NYSE:CVS) declined in the period following a disappointing first quarter earnings announcement and cut to guidance. The company reduced full year EPS guidance by ~16%, almost entirely driven by higher-than-expected costs in Medicare Advantage. Skepticism remains on management’s ability to execute and move past these issues but given the magnitude of the stock reaction (~19% decline) we think the risks are more than priced in at these levels. The issues with Medicare Advantage are now known and the company is working to fix them. With time, we believe they will be corrected. We continue to think CVS has an attractive long-term opportunity with its unique combination of assets owning a healthcare benefits business (Aetna), a pharmacy-benefits manager (Caremark), an in-home evaluation business (Signify Health) and in-home primary care business (Oak Street Health) supporting the industry transition to a value-based care model. While the most recent missteps are disappointing, the company still only trades at 8x lowered earnings estimates while continuing to pay a dividend (5% yield) and execute its repurchase program (16% of shares outstanding).”
A row of shelves in a retail pharmacy, demonstrating the variety of drugs and over-the-counter products.
CVS Health Corporation (NYSE:CVS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held CVS Health Corporation (NYSE:CVS) at the end of the first quarter which was 67 in the previous quarter. In the first quarter, CVS Health Corporation (NYSE:CVS) generated adjusted EPS of $1.31, which fell short of expectations. While we acknowledge the potential of CVS Health Corporation (NYSE:CVS) 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 CVS Health Corporation (NYSE:CVS) and shared ClearBridge Large Cap Value Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q2 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.