Saga Partners, an investment management firm, published its second-quarter 2022investor letter – a copy of which can be seen here. During the second quarter of 2022, the Saga Portfolio (“the Portfolio”) declined 56.3% net of fees. This compares to the overall decrease for the S&P 500 Index, including dividends, of 16.1%. The cumulative return since inception on January 1, 2017, for the Saga Portfolio, is -7.3% net of fees compared to the S&P 500 Index of 86.8%. The annualized return since inception for the Saga Portfolio is -1.4% net of fees compared to the S&P 500’s 12.0%. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Saga Partners mentioned GoodRx Holdings, Inc. (NASDAQ:GDRX) and explained its insights for the company. Founded in 2011, GoodRx Holdings, Inc. (NASDAQ:GDRX) is a Santa Monica, California-based price comparison platform provider with a $2.4 billion market capitalization. GoodRx Holdings, Inc. (NASDAQ:GDRX) delivered a -80.97% return since the beginning of the year, while its 12-month returns are down by -86.06%. The stock closed at $6.22 per share on September 13, 2022.
Here is what Saga Partners has to say about GoodRx Holdings, Inc. (NASDAQ:GDRX) in its Q2 2022 investor letter:
“The Portfolio first bought GoodRx at the end of 2020. I discussed the initial thesis in the H1’21 Investor Letter explaining how GoodRx is a prescription marketplace. GoodRx aggregates all available prescription prices across pharmacy benefit managers (PBMs). PBMs are the companies that negotiate prescription pricing with pharmacies on behalf of their insured customers. Historically, uninsured patients had to pay excessively high retail cash prices for prescriptions as a consequence of the contracts between pharmacies and PBMs. Through a discount card provider like GoodRx, consumers could get a coupon to access the much lower PBM prices. PBMs benefitted from discount cards generating incremental demand and earning the administration fees paid by pharmacies. PBMs then shared part of their administration fee with GoodRx.
As the prescription discount card space developed, GoodRx established itself as the dominant company with the second largest company (SingleCare) being about quarter of its size. Part of GoodRx’s success was their patent that enables only them to contract with multiple PBMs on a single interface. This meant that it was likely that the lowest prescription prices for people not using insurance were likely to be found on GoodRx, attracting more customers to GoodRx’s platform, which further incentivized PBMs to offer even lower prices on GoodRx to win that demand…” (Click here to see the full text)
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Our calculations show that GoodRx Holdings, Inc. (NASDAQ:GDRX) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. GoodRx Holdings, Inc. (NASDAQ:GDRX) was in 20 hedge fund portfolios at the end of the second quarter of 2022, compared to 24 funds in the previous quarter. GoodRx Holdings, Inc. (NASDAQ:GDRX) delivered a 6.14% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on GoodRx Holdings, Inc. (NASDAQ:GDRX) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
