Investment management company First Pacific Advisors recently released its “FPA Crescent Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, the fund (Institutional Class) gained 6.29%. It gained 16.13% in the trailing twelve months. The fund has captured 97.6% of the MSCI ACWI Index’s return over the past 12 months outperforming the average net risk of 73.8%. Crescent’s top and bottom performers had a significant impact on its return, with the top five contributing 6.19% and the bottom five detracting 1.54% in the previous twelve months. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
FPA Crescent Fund highlighted stocks like Open Text Corporation (NASDAQ:OTEX) in the second quarter 2023 investor letter. Based in Waterloo, Canada, Open Text Corporation (NASDAQ:OTEX) offers information management software and solutions. On September 12, 2023, Open Text Corporation (NASDAQ:OTEX) stock closed at $39.20 per share. One-month return of Open Text Corporation (NASDAQ:OTEX) was 4.98%, and its shares gained 30.36% of their value over the last 52 weeks. Open Text Corporation (NASDAQ:OTEX) has a market capitalization of $10.631 billion.
FPA Crescent Fund made the following comment about Open Text Corporation (NASDAQ:OTEX) in its Q2 2023 investor letter:
“Open Text Corporation (NASDAQ:OTEX)t was a relatively short-lived holding in comparison to our typical time frame. We were attracted to this Canadian-based provider of enterprise software due to its stable revenue stream. More than 80% of Open Text’s revenue was recurring, which helped deliver attractive mid-30s EBITDA margins. We considered the business to have a sticky customer base that included 97 of the 100 largest companies in the world. Purchased at a low double-digit multiple to after-tax free cash flow, we expected to own the company for years, with capital deployment going towards dividends, buybacks, and small bolt-on acquisitions, as it had in the past. Unfortunately, to our surprise, while we owned the stock, Open Text announced a relatively large acquisition in the form of UK-based Micro Focus. Familiar with the target, we were unenthused about both the asset and increased debt on the balance sheet from funding the purchase, so we chose to exit stage left rather than try to re-write our investment thesis.”
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Open Text Corporation (NASDAQ:OTEX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Open Text Corporation (NASDAQ:OTEX) at the end of second quarter which was 16 in the previous quarter.
We discussed Open Text Corporation (NASDAQ:OTEX) in another article and shared the list of most promising tech stocks according to analysts. In addition, please check out our hedge fund investor letters Q2 2023 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.
