Here’s Why TimesSquare U.S. Mid Cap Growth Strategy Trimmed Encompass Health Corporation (EHC)

TimesSquare Capital Management, an equity investment management company, released its “U.S. Mid Cap Growth Strategy” first-quarter investor letter. A copy of the letter can be downloaded here. The first quarter's performance for US small to mid-cap stocks was barbelled. In the first quarter, the strategy returned 10.16% (gross) and 9.95% (net) while the Russell Midcap Growth Index returned 9.50%. In addition, please check the fund’s top five holdings to know its best picks in 2024.

TimesSquare Capital U.S. Mid Cap Growth Strategy highlighted stocks like Encompass Health Corporation (NYSE:EHC), in the first quarter 2024 investor letter. Encompass Health Corporation (NYSE:EHC) is a post-acute healthcare services provider. The one-month return of Encompass Health Corporation (NYSE:EHC) was -0.61%, and its shares gained 26.81% of their value over the last 52 weeks. On June 27, 2024, Encompass Health Corporation (NYSE:EHC) stock closed at $85.86 per share with a market capitalization of $8.645 billion.

TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding Encompass Health Corporation (NYSE:EHC) in its first quarter 2024 investor letter:

"Our preferences among Health Care stocks are those companies providing novel therapies for unmet needs that deserve premium pricing, or specialized service providers. Here there was a 24% gain from Encompass Health Corporation (NYSE:EHC), one of the largest U.S. providers of post-acute services, such as rehabilitation. Revenues and earnings exceeded expectations with notable patient volume growth across all Encompass’s regions. The company’s management expects recently opened centers to provide an additional tailwind in the coming years. However, later we sharply trimmed the position on concerns that upcoming government rules might accelerate transferring patients out of inpatient rehabilitation facilities, such as those Encompass runs."

A home health aide helping an elderly person with their daily activities.

Encompass Health Corporation (NYSE:EHC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Encompass Health Corporation (NYSE:EHC) at the end of the first quarter which was 33 in the previous quarter. The first quarter revenue of Encompass Health Corporation (NYSE:EHC) increased by 13.4% mainly driven by volume as the total discharges increased by 10%. While we acknowledge the potential of Encompass Health Corporation (NYSE:EHC) 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 Encompass Health Corporation (NYSE:EHC) in another article and shared the list of best-performing stocks insiders are buying in 2024. 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.