Giverny Capital Underperforms Benchmark in Q4 Due to Tech Giants
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 17h ago
0mins
Source: seekingalpha
- Fund Performance Analysis: Giverny Capital underperformed in Q4 as the continued outperformance of a few tech giants negatively impacted the fund's returns relative to its benchmark, highlighting the adverse effects of market concentration on the portfolio.
- Portfolio Adjustments: During the quarter, the fund exited positions in Align Technology, CarMax, Credit Acceptance, and Fiserv, indicating a cautious outlook on these stocks, while initiating new positions in Watsco and Hawkins, reflecting a search for new opportunities.
- Position Increase and Decrease Strategy: The fund increased its holdings in TWFG and Kinsale Capital Group, demonstrating confidence in their future growth potential, while trimming Ametek due to its high valuation relative to growth rate, indicating a strict approach to valuation.
- Market Dynamics Impact: CarMax plans to reduce $150 million in SG&A expenses amid leadership transition, and wholesale used car prices in the U.S. have risen for the second consecutive month, which may affect its future profitability and market competitiveness.
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Analyst Views on ALGN
Wall Street analysts forecast ALGN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ALGN is 176.70 USD with a low forecast of 150.00 USD and a high forecast of 205.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
7 Buy
4 Hold
1 Sell
Moderate Buy
Current: 164.920
Low
150.00
Averages
176.70
High
205.00
Current: 164.920
Low
150.00
Averages
176.70
High
205.00
About ALGN
Align Technology, Inc. is a global medical device company that designs, manufactures, and sells the Invisalign system of clear aligners, iTero intraoral scanners, and exocad computer-aided design and computer-aided manufacturing (CAD/CAM) software for digital orthodontics and restorative dentistry. The Company provides Align Digital Platform. Its segments include Clear Aligner, and Imaging Systems and CAD/CAM Services (Systems and Services). The Clear Aligner segment consists of comprehensive products, non-comprehensive products and non-case products. Its comprehensive products include Invisalign Comprehensive and Invisalign First. The Company's non-case products include retention products, Invisalign training and adjusting tools. It offers up to four sets of custom clear aligners called Vivera retainers. The Systems and Services segment consists of its iTero intraoral scanning systems. Its services include subscription software, disposables, rentals, leases and pay per scan services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Giverny Capital Underperforms Benchmark in Q4 Due to Tech Giants
- Fund Performance Analysis: Giverny Capital underperformed in Q4 as the continued outperformance of a few tech giants negatively impacted the fund's returns relative to its benchmark, highlighting the adverse effects of market concentration on the portfolio.
- Portfolio Adjustments: During the quarter, the fund exited positions in Align Technology, CarMax, Credit Acceptance, and Fiserv, indicating a cautious outlook on these stocks, while initiating new positions in Watsco and Hawkins, reflecting a search for new opportunities.
- Position Increase and Decrease Strategy: The fund increased its holdings in TWFG and Kinsale Capital Group, demonstrating confidence in their future growth potential, while trimming Ametek due to its high valuation relative to growth rate, indicating a strict approach to valuation.
- Market Dynamics Impact: CarMax plans to reduce $150 million in SG&A expenses amid leadership transition, and wholesale used car prices in the U.S. have risen for the second consecutive month, which may affect its future profitability and market competitiveness.
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Align Technology Partners with CFAO to Provide Invisalign Treatment for 30 Patients
- Initiative Launch: Align Technology collaborates with the Canadian Foundation for the Advancement of Orthodontics (CFAO) to provide Invisalign treatment for 30 eligible patients through the Smiles4Canada program, aimed at assisting young patients from financially constrained families in accessing necessary orthodontic care.
- Community Impact: CFAO Executive Director Alison Nash emphasized that Align's support is critical for orthodontists to provide care to the most needy young patients, thereby enhancing their service capacity and professional values across Canadian communities.
- Historical Achievement: Since its inception in 2016, the Smiles4Canada program has benefited over 800 children by improving their oral health and self-esteem, and Align's involvement is expected to further amplify this impact, facilitating more children to receive orthodontic treatment.
- Ongoing Support Programs: Align also assists patients who may not be suitable for fixed appliances due to health issues or special needs through waived lab fees and other support measures, demonstrating the company's commitment to social responsibility.
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