Value investing firm Patient Capital Management highlights DXC Technology’s potential for growth and strong cash flow generation in its Q3 2023 investor letter.
Patient Capital Management, a renowned value investing firm, recently released its Q3 2023 investor letter, showcasing its “Patient Capital Opportunity Equity Strategy.” Despite a challenging quarter that saw a -6.0% return net of fees, compared to the S&P 500’s -3.3% return, the firm remains optimistic about the market’s potential. One of the key stocks highlighted in the letter is DXC Technology Company (NYSE:DXC), an information technology company known for its global business and infrastructure services. With its focus on stability, growth, and strong cash flow generation, DXC Technology has caught the attention of Patient Capital Management.
DXC Technology’s Journey to Growth
Patient Capital Management’s investor letter highlights DXC Technology Company as a key holding in its portfolio. DXC Technology, headquartered in Ashburn, Virginia, operates through its Global Business Services (GBS) and Global Infrastructure Services (GIS) segments. Despite a challenging market environment, DXC Technology has shown resilience and potential for growth.
DXC Technology Company closed at $20.29 per share on November 1, 2023, with a one-month return of -4.47%. Over the past 52 weeks, the stock has lost 21.08% of its value. With a market capitalization of $4.163 billion, DXC Technology remains an attractive investment opportunity.
A Strong Leadership and Stabilization Efforts
The investor letter highlights the appointment of Mike Salvino as CEO of DXC Technology in 2019. Salvino, who previously spent a decade at Accenture PLC, brought his expertise and experience to DXC Technology, focusing on stabilizing the business and implementing a growth strategy. Under Salvino’s leadership, DXC Technology has made significant progress in improving margins, generating stronger free cash flow, and enhancing client net promoter scores (NPS) and employee retention.
While DXC Technology has faced challenges in achieving topline growth, the company has consistently generated substantial amounts of free cash flow. Patient Capital Management notes that DXC Technology expects to generate $800 million in free cash flow, representing an 18% FCF yield. The company is committed to completing its $1 billion repurchase authorization in FY24, which represents 22% of shares outstanding. These shareholder-friendly actions indicate a commitment to returning value to investors.
Investor Sentiment and Hedge Fund Holdings
DXC Technology Company does not feature on the list of 30 Most Popular Stocks Among Hedge Funds. However, as per the database, 25 hedge fund portfolios held DXC Technology Company at the end of the second quarter, up from 23 in the previous quarter. This suggests growing interest and confidence in the company’s potential.
Patient Capital Management’s Q3 2023 investor letter highlights DXC Technology Company as a key holding. With a focus on stability, strong cash flow generation, and shareholder returns, DXC Technology has positioned itself for long-term growth. Despite the challenges faced by the market, Patient Capital Management remains optimistic about the potential of DXC Technology and its ability to deliver value to investors. As the company continues to execute its growth strategy under the leadership of CEO Mike Salvino, investors will be watching closely to see if DXC Technology can turn its strong cash flow into sustained topline growth.
Andre Rogers has been a content and opinion writer for many popular online publications over the years. Andre is now our chief editor at Louisiana Informer. Andre specializes in current trends and technology.
