What Makes Perrigo Company plc (PRGO) an Attractive Bet?
Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. Major index returns increased in the quarter due to strong earnings from large-cap technology companies, especially those connected to artificial intelligence. However, the market's breadth revealed a different picture. The fund returned -5.03% (net) during the quarter underperforming the -4.27% return of the Russell 2500 Index and -4.31% returns of the secondary benchmark the Russell 2500 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Meridian Contrarian Fund highlighted stocks like Perrigo Company plc (NYSE:PRGO), in the second quarter 2024 investor letter. Perrigo Company plc (NYSE:PRGO) offers over-the-counter health and wellness solutions. The one-month return of Perrigo Company plc (NYSE:PRGO) was -3.01%, and its shares lost 20.52% of their value over the last 52 weeks. On September 11, 2024, Perrigo Company plc (NYSE:PRGO) stock closed at $26.73 per share with a market capitalization of $3.646 billion.
Meridian Contrarian Fund stated the following regarding Perrigo Company plc (NYSE:PRGO) in its Q2 2024 investor letter:
"Perrigo Company plc (NYSE:PRGO) is the leading in-store brand for consumer wellness and self-care products. The company endured several years of declining earnings due to what we believe was poor capital allocation by its previous management team, which chased growth through acquisitions outside of Perrigo’s core business. Our investment in Perrigo was inspired by a new management team that committed to pursuing realistic, steady growth rates within the core business, and delivering improved profitability and returns on capital. Despite reporting inline earnings results and maintaining annual guidance during the quarter, Perrigo stock has been weak. Market data and drug store company results have indicated a lower-than-average cough, cold, and allergy season that might be impacting short-term results. We increased our position as we believe the risk vs. reward is in our favor. In our view, Perrigo is well positioned for significant earnings growth in 2025 and beyond while trading at a current valuation of 10x current year earnings per share."
A doctor and a patient discussing the benefits of OTC health and wellness solutions.
Perrigo Company plc (NYSE:PRGO) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Perrigo Company plc (NYSE:PRGO) at the end of the second quarter which was 38 in the previous quarter. While we acknowledge the potential of Perrigo Company plc (NYSE:PRGO) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Perrigo Company plc (NYSE:PRGO) and shared the list of best mid-cap healthcare stocks to buy. During Q2 2024, O’keefe Stevens Advisory initiated a position in Perrigo Company plc (NYSE:PRGO). In addition, please check out our hedge fund investor letters Q2 2024 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.