4 Stocks To Buy According To Dennis Goldstein’s Rip Road Capital

3. GoodRx Holdings, Inc. (NASDAQ:GDRX)

Rip Road Capital’s Stake Value: $31,398,000

Percentage of Rip Road Capital’s 13F Portfolio: 9.26%

Number of Hedge Fund Holders: 26

GoodRx Holdings, Inc. (NASDAQ:GDRX) is a healthcare company operating a telemedicine platform, a website, and a mobile application that offers coupons to users for medicine discounts and compares prescription drug prices across the US. GoodRx Holdings, Inc. (NASDAQ:GDRX) has millions of monthly users, and is one of Dennis Goldstein’s top stock picks for the third quarter. 

Rip Road Capital owns 765,438 shares of GoodRx Holdings, Inc. (NASDAQ:GDRX), amounting to $31.39 million, representing 9.26% of the firm’s Q3 portfolio. 

At the end of September, 26 hedge funds were bullish on GoodRx Holdings, Inc. (NASDAQ:GDRX), as compared to 28 funds in the previous quarter. 

Here is what Saga Partners has to say about GoodRx Holdings, Inc. (NASDAQ:GDRX) in its Q2 2021 investor letter:

“The Saga Portfolio first bought GoodRx at the end of 2020 and has added to it throughout 2021. As it has become a larger position in the Portfolio, it makes sense to explain the investment thesis in more detail.

For those who don’t care to understand the prescription drug value chain, feel free to skip over this section. While few readers may really care about the fairly complicated prescription drug value chain, it is important to review in order to understand the role that GoodRx plays within the ecosystem. This is my best attempt in trying to explain it in a few paragraphs.

Like many other parts of the U.S. healthcare system, prescription drugs suffer from complex and non-transparent pricing with access largely controlled by health plan payers. The majority of people in the U.S. have insurance provided by either their employer or a government program such as Medicare or Medicaid. Consumers largely rely on third parties to determine which drugs are covered by their health plan, and therefore which drugs may or may not be affordable.

Pharmacy benefit managers (PBMs) play a significant role and sit in the middle of three different parties. They are the intermediary between health insurers, pharmacies, and drug manufacturers. Health insurers hire PBMs to manage prescription drug plans for their covered population. PBMs negotiate on behalf of the health insurer with pharmacies. Pharmacies enter pricing contracts with PBMs in an effort to drive more demand to the store…” (Click here to see the full text)