S4 Capital Rises on Earnings while Royalty Pharma Falls on Tax Headlines
Last week, the Opportunity Equity Strategy’s representative account fell -3.91%, underperforming the S&P 500’s -1.52% decline. (Exhibit 1). The strategy ended the week down -8.42% YTD, -361 basis points behind the S&P 500.Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 3/28/251
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (3/21 - 3/28) | -3.91% | -1.52% |
| MTD | -9.00% | -6.16% |
| QTD | -8.42% | -4.81% |
| YTD | -8.42% | -4.81% |
| 1 Year | 3.48% | 7.64% |
| 5 Year | 17.68% | 18.86% |
| 10 Year | 7.47% | 12.48% |
| Inception (annualized since 6/26/00) | 7.29% | 7.58% |
Source: Bloomberg, Patient Capital Management.
QXO, Inc. (QXO) rose through the 50-day moving average. The stock continued to rise after entering into a definitive merger agreement to acquire Beacon Roofing (BECN) for $124.35 per share.
S4 Capital plc (SFOR LN) rose through the 50-day and 100-day moving averages after announcing earnings that beat on the top and bottom line. S4 delivered revenue of £848M vs. £782M expected and adjusted EPS of £0.052 vs. £0.046. The company expects similar revenue and EBITDA for FY25. Jefferies raised their price target from 50GBp to 55GBp (58% upside). Jefferies is optimistic on S4’s cost discipline, margin expansion, and recent dividend proposal (~3% yield). They view the dividend proposal as a signal for improved balance sheet strength.
Crocs, Inc. (CROX) rose through the 100-day moving average on limited news.
JP Morgan increased their price target on Energy Transfer LP (ET) from $24 to $25 (34% upside). JP Morgan believes the company is well positioned to benefit from AI-focused energy opportunities. Energy Transfer already has requests from 62 power plants and 70 data centers. JPM views the company’s current discount to its peers, 7% dividend yield, and growth potential as an attractive setup for long-term investors.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 3/21/25 - 3/28/25
| Name | Type | Net Return |
| QXO, Inc. | Equity | 8.6% |
| S4 Capital plc | Equity | 6.3% |
| Crocs, Inc. | Equity | 1.3% |
| New Security* | Equity | 7.0% |
| Energy Transfer LP | Equity | 0.6% |
Source: Patient Capital Management. See below for additional information.
Royalty Pharma plc (RPRX) fell through the 50-day moving average after US Secretary of Commerce, Howard Lutnick, referred to Ireland as a tax scam for pharmaceutical companies’ intellectual property (IP) rights. Any policy changes would be irrelevant to Royalty Pharma due to its corporate structure as a pass-through entity. Bank of America reiterated their $41 price target (31% upside).
Guggenheim lowered their price target on Alphabet Inc. (GOOGL) from $215 to $190 (23% upside) and maintained their buy rating.
Bank of America conducted a sensitivity analysis on Nvidia Corp (NVDA), examining potential EPS implications from restrictions on China. In BofA’s bear case scenario, Nvidia is trading at ~26x next year’s earnings. In BofA’s bull case scenario, Nvidia is trading at ~20x next year’s earnings. Both scenarios are a discount to the company’s historic 36x forward P/E multiple. Bank of America believes the valuation for Nvidia looks compelling and maintained their $200 price target (82% upside).
General Motors Co (GM) fell through the 50-day and 200-day. JP Morgan lowered their price target
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 3/21/2025 – 3/28/2025
| Name | Type | Net Return |
| Royalty Pharma plc | Equity | -6.9% |
| Alphabet Inc. | Equity | -5.9% |
| New Security* | Equity | -20.8% |
| Nvidia Corp | Equity | -6.8% |
| General Motors Co | Equity | -6.3% |
Source: Patient Capital Management. See below for additional information.
As of prior week's market close unless otherwise stated.
1The performance figures for the representative Opportunity Equity account reflect the deduction investment management fees and certain other expenses. Returns greater than 1 year are annualized.
For additional information about Opportunity Equity Strategy performance, please click on the Opportunity Equity Strategy Composite Performance Disclosure. Past performance is no guarantee of future results.
2Significant Contributors and Detractors are based on holdings that had the greatest effect on representative account performance for the week. Holdings that have been in the portfolio since the end of the most recent calendar quarter are identified by name. The net return shown above for each individual security represents the change in market price of the security during the week, according to a third-party pricing service, or for the partial period held in the portfolio during the week. Net returns also include any purchases or sales that were made during the week. For information on how Contributor/Detractor data were calculated and a list showing the contribution to the Strategy’s weekly performance of each investment held at such quarter end, contact us.
Any views expressed are subject to change at any time, and Patient Capital Management disclaims any responsibility to update such views. There is no guarantee that market trends discussed herein will continue. The information presented should not be considered a recommendation to purchase or sell any security and should not be relied upon as investment advice. It should not be assumed that any purchase or sale decisions will be profitable or will equal the performance of any security mentioned. Past performance is no guarantee of future results, and there is no guarantee dividends will be paid or continued. References to specific securities are for illustrative purposes only. Portfolio composition is shown as of a point in time and is subject to change without notice. Content may not be reprinted, republished or used in any manner without written consent from Patient Capital Management.
©2025 Patient Capital Management, LLC
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