On December 31, 2024, PRIMECAP Management (Trades, Portfolio) executed a significant reduction in its holdings of LivaNova PLC, a UK-based medical device company. The transaction involved a decrease of 873,746 shares, representing a 15.53% change in the firm's position. This move reflects PRIMECAP's strategic decision-making in managing its investment portfolio, which is known for its focus on long-term value and fundamental research. The shares were traded at a price of $46.31, impacting PRIMECAP's portfolio by -0.03%.
About PRIMECAP Management (Trades, Portfolio)
Founded in 1983 and based in Pasadena, CA, PRIMECAP Management (Trades, Portfolio) is an independent investment management company. The firm specializes in managing US-focused equity portfolios for a select group of institutions and mutual funds. PRIMECAP is renowned for its long-term investment horizon and commitment to fundamental research. The firm's investment philosophy emphasizes recognizing undervalued stocks early and maintaining patience until the market aligns with its valuation. PRIMECAP's top holdings include Amgen Inc (AMGN, Financial), Microsoft Corp (MSFT, Financial), and Boston Scientific Corp (BSX, Financial).
Overview of LivaNova PLC
LivaNova PLC, formed from the merger of Cyberonics and Sorin, is a prominent player in the medical device industry. The company focuses on cardiopulmonary solutions and neuromodulation devices, catering to treatment-resistant epilepsy and depression. LivaNova derives significant revenue from the US and European markets. The company's current market cap stands at $2.59 billion, with a price-to-earnings (PE) ratio of 113.38, indicating a modest undervaluation. The stock's GF Value is $60.90, suggesting a price to GF Value ratio of 0.78, and a GF Score of 76/100.
Details of the Stock Transaction
Following the transaction, PRIMECAP Management (Trades, Portfolio) holds 4,754,060 shares of LivaNova, which constitutes 0.16% of its portfolio and 8.76% of LivaNova's total shares. The transaction reflects a strategic adjustment in PRIMECAP's holdings, aligning with its investment philosophy of focusing on long-term value. Despite the reduction, LivaNova remains a significant part of PRIMECAP's diversified portfolio.
Financial Metrics and Valuation of LivaNova PLC
LivaNova's financial metrics reveal a company with potential for growth. The firm's revenue growth over the past three years is 3.40%, with a balance sheet rank of 6/10. The stock has shown a 2.83% gain since the transaction, with a year-to-date increase of 2.08%. LivaNova's Altman Z score is 1.61, indicating moderate financial health, while its interest coverage ratio is 1.49, reflecting its ability to meet interest obligations.
Performance and Growth Indicators
LivaNova's performance indicators suggest a company with steady growth potential. The stock's Growth Rank is 4/10, and its Profitability Rank is 5/10. The company's Operating Margin growth is stable, and its Piotroski F-Score is 6, indicating moderate financial strength. LivaNova's GF Value Rank is 10/10, suggesting it is trading below its intrinsic value.
Other Gurus Holding LivaNova PLC
Besides PRIMECAP Management (Trades, Portfolio), notable investors in LivaNova include Joel Greenblatt (Trades, Portfolio) and Barrow, Hanley, Mewhinney & Strauss. Greenlight Capital holds the largest share percentage among gurus invested in LivaNova, highlighting the stock's appeal among prominent investors.
Transaction Analysis
The reduction in PRIMECAP Management (Trades, Portfolio)'s stake in LivaNova PLC reflects a strategic portfolio adjustment, aligning with the firm's long-term investment philosophy. Despite the reduction, LivaNova remains a significant holding, indicating PRIMECAP's continued confidence in the company's growth potential. The transaction's impact on PRIMECAP's portfolio is minimal, at -0.03%, suggesting a calculated decision to optimize its investment strategy.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
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