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Here’s Why Surgery Partners (SGRY) Sold Off in Q1

ClearBridge Investments, an investment management company, released its “ClearBridge Select Strategy” first quarter 2024 investor letter. A copy of the letter can be downloaded here. The positive momentum in 2023 continued in the first quarter of 2024, the stocks surged on the expectation of a soft landing of the economy and a slowdown in rate hikes by the Fed. Against this backdrop, the S&P Index surged 10.56% and the Russell 3000 Index gained 10.02%. The strategy underperformed its Russell 3000 Index benchmark in the quarter. IT and industrial sectors were the primary contributors while the real estate sector detracted. In addition, please check the fund’s top five holdings to know its best picks in 2024.

ClearBridge Select Strategy highlighted stocks like Surgery Partners, Inc. (NASDAQ:SGRY), in the first quarter 2024 investor letter. Surgery Partners, Inc. (NASDAQ:SGRY) owns and operates a network of surgical facilities and ancillary services. The one-month return of Surgery Partners, Inc. (NASDAQ:SGRY) was -3.54%, and its shares lost 41.72% of their value over the last 52 weeks. On June 21, 2024, Surgery Partners, Inc. (NASDAQ:SGRY) stock closed at $24.49 per share with a market capitalization of $3.113 billion.

ClearBridge Select Strategy stated the following regarding Surgery Partners, Inc. (NASDAQ:SGRY) in its first quarter 2024 investor letter:

"Surgery Partners, Inc. (NASDAQ:SGRY), which carries a higher degree of leverage than other holdings in the Strategy, was negatively impacted by a technical hangover from insider selling at year-end and rate cut projections from the Federal Reserve that continued to be dialed back as the economy and hiring remained strong."

A surgeon wearing gloves and a mask, performing a procedure in a well-equipped surgical facility.

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Surgery Partners, Inc. (NASDAQ:SGRY) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Surgery Partners, Inc. (NASDAQ:SGRY) at the end of the first quarter which was 22 in the previous quarter. In the first quarter, Surgery Partners, Inc. (NASDAQ:SGRY) generated approximately $717 million in revenues, up 7.7% over the prior-year quarter. While we acknowledge the potential of Surgery Partners, Inc. (NASDAQ:SGRY) 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 Surgery Partners, Inc. (NASDAQ:SGRY) in another article and shared Baron Health Care 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.