Patient Capital Management is a Baltimore asset manager founded in 2020 by Samantha McLemore, CFA — Bill Miller's long-time co-manager (working together since 2002, running the flagship Opportunity Equity strategy since 2014). Continuing the Miller-school contrarian tradition, it practices "time arbitrage": exploiting behavioral mispricing to concentrate in controversial growth names (tech, healthcare, Bitcoin-related) at deep discounts to intrinsic value. Its site preserves Bill Miller's complete 1995-2022 market letters, alongside ongoing quarterly letters and webinars.
This report explains how a fund manager adjusted his portfolio in the third quarter. He focuses on two stocks: Precigen (a small biotech company developing a rare disease drug) and UnitedHealth (a health insurance giant). He believes Precigen's new drug still has about 80% upside, and UnitedHealth's profit could double in three to five years despite current industry headwinds. For ordinary investors, the takeaway is: don't just chase hot stocks; look for undervalued ones. Also, understand what you're buying rather than following hype. It's worth reading because it shows how professionals balance risk and reward.
Patient Capital's Patient Opportunity Equity Strategy delivered strong performance in the third quarter, with a return of 14.1%, significantly outperforming the benchmark S&P 500's 8.1%; year-to-date return stands at 18.9%, also ahead of the S&P 500's 14.8%. Since taking over at the end of 2022, the
This chapter primarily discusses the investment performance and portfolio adjustments of Patient Capital's Patient Opportunity Equity Strategy in the third quarter. The report notes that while rising market valuations have reduced new opportunities, the fund manager maintains high confidence in the existing portfolio, with a focused analysis of the investment logic behind two core holdings: Precigen (PGEN) and UnitedHealth (UNH).
The author's core investment thesis is: in the late stages of a bull market, balance "letting winners run" with "redeploying capital into mispriced laggards." Counterintuitive judgments include: 1) Despite Precigen's significant rally, the papillomatosis indication still offers approximately 80% upside, and if the entire pipeline succeeds, the value could reach 10-15 times current levels; 2) UnitedHealth faces industry headwinds, but the author believes its business remains intact, with earnings capable of doubling over the next 3-5 years.
Comparative Data Table:
| Metric | Patient Opportunity Equity Strategy | S&P 500 |
|---|---|---|
| Q3 Return | 14.1% | 8.1% |
| Year-to-Date Return | 18.9% | 14.8% |
| Annualized Return Since End of 2022 | 31.5% | 24.1% |