Is Still Safe to Invest in Stericycle (SRCL)?

Diamond Hill Capital, an investment management firm, published its “Diamond Hill Small Cap Fund” fourth-quarter 2021 investor letter – a copy of which can be downloaded here. The portfolio outpaced the Russell 2000® Index in the quarter, adding to full-year outperformance. Relative performance was aided by our below-benchmark health care exposure, particularly its lack of exposure to biotechnology stocks which were down nearly 13% in the quarter and represent almost half the sector’s weight Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Diamond Hill Small Cap Fund, in its Q4 2021 investor letter, mentioned Stericycle, Inc. (NASDAQ: SRCL) and discussed its stance on the firm. Stericycle, Inc. is a Bannockburn, Illinois-based compliance company with a $5.3 billion market capitalization. SRCL delivered a -3.05% return since the beginning of the year, while its 12-month returns are down by -10.87%. The stock closed at $57.82 per share on February 25, 2022.

Here is what Diamond Hill Small Cap Fund has to say about Stericycle, Inc. in its Q4 2021 investor letter:

“Bottom contributors in Q4 included Stericycle. Stericycle is the largest provider of regulated medical waste management in the U.S. Implementation of a new enterprise resource planning (ERP) system has caused productivity declines in the near term. Longer term, we believe the ERP investment will greatly increase productivity and reduce costs. We anticipate the business will continue to improve with ongoing revenue growth, as cost savings drive margin expansion amid debt paydown.”

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Our calculations show that Stericycle, Inc. (NASDAQ: SRCL) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. SRCL was in 16 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 17 funds in the previous quarter. Stericycle, Inc. (NASDAQ: SRCL) delivered a -4.32% return in the past 3 months.

In December 2021, we also shared another hedge fund’s views on SRCL in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

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