Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” second quarter 2023 investor letter. A copy of the same can be downloaded here. The strategy had a strong performance in the second quarter, returning 13.31% net of fees compared to the S&P 500’s 8.74% gain. The strategy grew 20.91% over the last year, compared to a 19.59% increase for the market. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Patient Capital Opportunity Equity Strategy highlighted stocks like Citigroup Inc. (NYSE:C) in the second quarter 2023 investor letter. Headquartered in New York, New York, Citigroup Inc. (NYSE:C) is a diversified financial service holding company. On October 4, 2023, Citigroup Inc. (NYSE:C) stock closed at $39.81 per share. One-month return of Citigroup Inc. (NYSE:C) was -2.26%, and its shares lost 7.55% of their value over the last 52 weeks. Citigroup Inc. (NYSE:C) has a market capitalization of $76.662 billion.
Patient Capital Opportunity Equity Strategy made the following comment about Citigroup Inc. (NYSE:C) in its Q2 2023 investor letter:
“We’ve recently been adding to Citigroup Inc. (NYSE:C). After perennially disappointing for decades, even the most bullish financial investors aren’t interested (a good thing in our view!). CEO Jane Fraser is making all the right moves: exiting underperforming consumer businesses, investing to improve the tech and operating infrastructure, returning capital to shareholders. These actions should result in improving returns on equity. The market reaction is a giant shrug.
We should start to see serious cost improvements in late 2024 accompanied by improving returns on equity. The stock trades at ~$46, 55% of its $85 tangible book value. The company is confident it can reach 11-12% return on tangible common equity by 2025 when it’s tangible book should be greater than $100. If it reaches its return target, as we believe, Citi should trade back to tangible book, implying a more than double over the next couple years. Meanwhile, you collect the 4.5% annual dividend, which is currently a better yield than long-term treasuries.
Citigroup Inc. (NYSE:C) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 75 hedge fund portfolios held Citigroup Inc. (NYSE:C) at the end of second quarter which was 79 in the previous quarter.
We discussed Citigroup Inc. (NYSE:C) in another article and shared the list of Warren Buffett stocks that are on sale. 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.
