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What Made The Brown Capital Management Small Company Fund to Sell QuidelOrtho Corporation (QDEL)?

Brown Capital Management, an investment management company, released its “The Brown Capital Management Small Company Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. The Small Company Fund returned 0.48%, significantly underperforming the Russell 2000 Growth index’s 7.58% return. Following the release of the inflation report in February, the Small Company Fund experienced underperformance as investors shifted away from high-growth companies, impacting their valuations. In addition, check the fund’s top five holdings to know its best picks in 2024.

The Brown Capital Management Small Company Fund highlighted stocks like QuidelOrtho Corporation NASDAQ:QDEL), in the first quarter 2024 investor letter. QuidelOrtho Corporation (NASDAQ:QDEL) is a diagnostic testing solutions provider. The one-month return of QuidelOrtho Corporation (NASDAQ:QDEL) was -23.02%, and its shares lost 58.18% of their value over the last 52 weeks. On June 24, 2024, QuidelOrtho Corporation (NASDAQ:QDEL) stock closed at $33.91 per share with a market capitalization of $2.271 billion.

The Brown Capital Management Small Company Fundstated the following regarding QuidelOrtho Corporation (NASDAQ:QDEL) in its first quarter 2024 investor letter:

"QuidelOrtho Corporation (NASDAQ:QDEL) has historically sold rapid diagnostic-testing solutions to physician offices, hospitals, clinical laboratories and reference laboratories. These diagnostic solutions detect infectious diseases, cardiovascular diseases, women’s health conditions, gastrointestinal diseases and autoimmune diseases. In late 2021, Quidel acquired a larger company, Ortho Diagnostics, to become QuidelOrtho. Ortho Diagnostics was founded 80 years ago as part of Johnson & Johnson and focuses on slower growing businesses, including immunoassays, clinical chemistry and transfusion medicine. We believe the Ortho acquisition has changed the growth profile of the company and as such we decided to sell the company out of the portfolio in the first quarter."

A scientist observing the results of a molecular diagnostic test.

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QuidelOrtho Corporation (NASDAQ:QDEL) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held QuidelOrtho Corporation (NASDAQ:QDEL) at the end of the first quarter which was 32 in the previous quarter. In the first quarter 2024, QuidelOrtho Corporation (NASDAQ:QDEL) reported revenue of $711 million, down from $846 million in the first quarter 2023. While we acknowledge the potential of QuidelOrtho Corporation (NASDAQ:QDEL) 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.

We discussed QuidelOrtho Corporation (NASDAQ:QDEL) in another article and shared Meridian Small Cap Growth Fund's views on the company. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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