Riverwater Partners, an investment management company, released its “Small Cap Core Strategy” Q3 2024 investor letter. A copy of the letter can be downloaded here. The strategy outperformed its benchmark, the Russell 2000, both in the third quarter and year-to-date, driven by disciplined stock selection across a diverse range of sectors. Energy and IT were the top-performing sectors while Consumer Staples and Healthcare holdings detracted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Riverwater Partners Small Cap Core Strategy highlighted stocks like Merit Medical Systems, Inc. (NASDAQ:MMSI) in the third quarter 2024 investor letter. Merit Medical Systems, Inc. (NASDAQ:MMSI) designs, develops, manufactures, and markets single-use medical products. The one-month return of Merit Medical Systems, Inc. (NASDAQ:MMSI) was -7.95%, and its shares gained 27.04% of their value over the last 52 weeks. On December 30, 2024, Merit Medical Systems, Inc. (NASDAQ:MMSI) stock closed at $96.50 per share with a market capitalization of $5.624 billion.
Riverwater Partners Small Cap Core Strategy stated the following regarding Merit Medical Systems, Inc. (NASDAQ:MMSI) in its Q3 2024 investor letter:
“Our outlook for Q4 2024 and 2025 is optimistic in light of what we consider to be opportunities presented by additions to the portfolio during the third quarter. We purchased three new names in Q3 2024: Merit Medical Systems, Inc. (NASDAQ:MMSI), Atmus Filtration Technologies, Inc. (ATMU) and Uranium Energy Corp. (UEC).
Merit Medical Systems, Inc. (MMSI), is a leading manufacturer and marketer of proprietary disposable medical devices used in interventional, diagnostic, and therapeutic procedures, particularly in cardiology, radiology, oncology, critical care, and endoscopy. MMSI successfully executed its Foundation for Growth program launched in 2020 which aimed to generate above-market (5%) revenue growth, with 400 bp margin expansion and free cash flow of $300mm by the end of 2023. Today the company has a full new-product pipeline to support steady mid-single-digit top-line organic growth, and continued margin expansion, for the next several years. MMSI’s recently FDA-approved WRAPSODY stent graft for dialysis patients, as well as products from recently acquired Angiodynamics and Bluegrass Vascular, will be major contributors. This revenue growth should enable low double-digit EBITDA growth and shareholder return over time.”
A surgeon using endoscopy products to perform a medical procedure.
Merit Medical Systems, Inc. (NASDAQ:MMSI) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Merit Medical Systems, Inc. (NASDAQ:MMSI) at the end of the third quarter which was 22 in the previous quarter. Merit Medical Systems, Inc. (NASDAQ:MMSI) reported total revenue of $339.8 million in the third quarter, up 7.8% year-over-year on a GAAP basis and up 7.9% year-over-year on a constant currency basis. While we acknowledge the potential of Merit Medical Systems, Inc. (NASDAQ:MMSI) 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 Merit Medical Systems, Inc. (NASDAQ:MMSI) and shared Conestoga Capital Advisors’ views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 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.