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Investment management firm Cooper Investors has announced the fourth quarter 2023 investor letter for Cooper Investors Global Equity Fund. You can download a copy of the same here. The fund returned +8.31% in the fourth quarter, compared to the benchmark MSCI ACWI’s return of 8.75%. In CY2023, the portfolio generated an absolute return of +19%. This was a solid performance in a year marked by extreme volatility and pessimistic economic forecasts by many analysts. Plus, check out the fund’s top 5 holdings to find out the best stocks for 2023.
Cooper Investors Global Equity Fund featured stocks such as GE Healthcare Technologies (NASDAQ:GEHC) in its Q4 2023 Investor Letter. GE HealthCare Technologies Inc. (NASDAQ:GEHC), headquartered in Chicago, Illinois, is a medical technology, pharmaceutical diagnostics and digital solutions company. On January 23, 2024, GE Healthcare Technologies Inc. (NASDAQ:GEHC) stock closed at $73.67 per share. His 1-month return for GE Healthcare Technologies (NASDAQ:GEHC) is -5.15%, and the stock has increased his 7.22% in value over the past 52 weeks. GE Healthcare Technologies (NASDAQ:GEHC) has a market capitalization of $33.538 billion.
Cooper Investors Global Equity Fund said the following about GE Healthcare Technologies, Inc. (NASDAQ:GEHC) in its Q4 2023 investor letter:
“The portfolio initiated positions during the quarter GE Healthcare Technologies Co., Ltd. (NASDAQ:GEHC). GEHC is the former healthcare division of GE that was spun out in early 2023. We are a world leader in imaging equipment and related supplies, including MRI machines, CT scanners, and ultrasound systems. The business has a long and storied history, but it was trapped within a large, underperforming conglomerate and starved of the love and attention it needed to grow.
From a value subset perspective, we view GEHC as a low-risk turnaround. Although the underlying business is fundamentally sound, it has ceded market share over time and sales growth has lagged behind the industry. There are significant margin opportunities as our core imaging margins (approximately 50% of sales) are much lower than our major competitors. We see two drivers recovering their performance. First is the increase in R&D spending (since 2017, R&D spending has increased by 70%, far outpacing revenue growth). The second is an opportunity to improve the cost efficiency of SG&A expenses.
What makes a turnaround less risky? The quality of management and the board of directors is critical. GEHC has several people we call “CI alumni.” These are executives that we’ve invested in late to other companies. At the top of this list is Danaher’s former CEO and Chairman Larry Culp, the executive we most admire.
GEHC has strong financial characteristics. The company is a market leader in an oligopolistic industry where market share changes slowly and a large portion of gross profit is derived from the aftermarket. The balance sheet is well balanced with well structured debt. An analysis of GEHC’s financial results suggests that conservatism may be ingrained in its income statement. At today’s stock price, there’s little reason to assume things will continue to do well. This partly reflects the pressure on healthcare stocks this year. If GEHC can fulfill its potential, there will be significant benefits. ”
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GE Healthcare Technologies (NASDAQ:GEHC) isn’t on the list of 30 most popular stocks among hedge funds. According to our database, 41 hedge fund portfolios held GE Healthcare Technologies (NASDAQ:GEHC) at the end of the third quarter, compared to 44 in the prior quarter.
We covered GE Healthcare Technologies, Inc. (NASDAQ:GEHC) in a separate article where we shared Jim Cramer’s 2024 predictions and top stock picks. Additionally, for investor letters from hedge funds and other leading investors, please visit our Hedge Fund Investor Letters Q4 2023 page.
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Disclosure: None. This article was originally published on Insider Monkey.
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