Electromed (ELMD) Stock Price Declined Due to Difficulty in Generating Profitable Revenue Growth

Summers Value Partners, an asset management company, released its “The Summers Value Fund LP” second quarter 2022 investor letter. A copy of the same can be downloaded here. In the first half of 2022, the fund returned -25.9% net of all expenses. The overall market condition affected the performance of the fund and it underperformed compared to all benchmark indexes. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

In the second quarter investor letter, Summers Value Partners discussed stocks like Electromed, Inc. (NYSE:ELMD). Headquartered in New Prague, Minnesota, Electromed, Inc. (NYSE:ELMD) is a medical device company that develops, manufactures, and distributes airway clearance technologies. On September 1, 2022, Electromed, Inc. (NYSE:ELMD) stock closed at $9.25 per share. One-month return of Electromed, Inc. (NYSE:ELMD) was 1.20% and its shares lost 32.23% of their value over the last 52 weeks. Electromed, Inc. (NYSE:ELMD) has a market capitalization of $78.398 million.

Here is what Summers Value Partners specifically said about Electromed, Inc. (NYSE:ELMD):

“The biggest detractors during the first half of 2022 were Inotiv (NOTV) and Electromed, Inc. (NYSE:ELMD). The perception of a slowing R&D funding environment for small pharmaceutical and biotechnology companies weighed on Inotiv’s share price. While the funding environment certainly has become more difficult, Inotiv is highly diversified with over 3,000 clients including academic centers and other clinical research organizations (CRO). Pre-commercial clients only represent 20% of its sales mix. Additionally, Inotiv is a market share gainer in the CRO industry as it benefits from its intense focus on the customer experience. As such, we believe the company is positioned to weather the storm. We continue to own shares of Inotiv; however, we reduced the position size in the first quarter. Electromed’s share price declined as the company has struggled to generate profitable revenue growth over the past few years. The company has also been hurt by a pattern of turnover on the executive team. We believe that Electromed should balance its growth aspirations against shareholders’ desire for higher profit margins and a more compelling return on invested capital (ROIC) profile.”

Copyright: nicoletaionescu / 123RF Stock Photo

Electromed, Inc. (NYSE:ELMD) is not on the list of 30 Most Popular Stocks Among Hedge Funds. As per our database, Electromed, Inc. (NYSE:ELMD) was held by 3 hedge fund portfolios at the end of the second quarter, which was 5 in the previous quarter.

We discussed Electromed, Inc. (NYSE:ELMD) in another article and shared Summers Value Partners’ views on the company. You can check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other prominent investors.

Disclosure: None. This article is originally published at Insider Monkey.