FMCQF - Broyhill - Fresenius Medical Care: Correctly Focused On Increasing Margins And Returns
2024-02-23 10:20:00 ET
Summary
- We established a position in Fresenius Medical Care, a German healthcare company specializing in kidney dialysis and related products, at "Peak Obesity" in October of last year.
- At current prices, shares appear to discount only the worst possible scenarios.
- FMS is trading at 12x depressed earnings, sentiment is thoroughly washed out, and new additions to the board and the executive team are correctly focused on increasing margins and returns.
The following segment was excerpted from this fund letter.
Fresenius Medical Care ( FMS )
Second only to AI last year was the rhetoric and enthusiasm around GLP-1 weight loss drugs. These drugs, which by some estimates will generate over $100 billion in sales by the end of this decade, were popping up on just about every earnings call last year, with analysts drilling management teams on the risks to their business and investors punishing their stocks. Our work ramped alongside the hysteria. We analyzed the implications of everything from coffee and beer consumption to snacks and candy cravings before landing squarely on obesity and diabetes, where we found the greatest potential threats, the largest dislocations, and the widest gap between perception and reality....
Broyhill - Fresenius Medical Care: Correctly Focused On Increasing Margins And Returns