Is EPAM Systems (EPAM) Still a Safe Investment?

·2 min read

White Falcon Capital Management LLC, an investment management firm, published its fourth quarter 2022 investor letter – a copy of which can be downloaded here. A quarterly net increase of 2.52% has been recorded by the fund for the fourth quarter of 2022, below the S&P 500 (CAD) Index’s 5.25% gain for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

In its Q3 2022 investor letter, White Falcon Capital Management mentioned EPAM Systems, Inc. (NYSE:EPAM) and explained its insights for the company. Founded in 1993, EPAM Systems, Inc. (NYSE:EPAM) is a Newtown, Pennsylvania-based system software company with a $19.8 billion market capitalization. EPAM Systems, Inc. (NYSE:EPAM) delivered a 5.27% return since the beginning of the year, while its 12-month returns are down by -25.76%. The stock closed at $345.02 per share on January 20, 2023.

Here is what White Falcon Capital Management has to say about EPAM Systems, Inc. (NYSE:EPAM) in its Q3 2022 investor letter:

"Half of the portfolio had positive realized and unrealized gains for the year. Out of these, EPAM Systems and Maxar were the largest positive contributors to performance. In addition, our weight in the commodity sector, including the precious metals hedge, produced substantial positive returns.

EPAM Systems is an IT services company. We initiated a position in EPAM after it sold off when Russia invaded Ukraine. The concern was that EPAM had a large part of its workforce in Ukraine, Belarus and Russia. Until then, EPAM had been a high quality compounder whose stock price had gone up 10x in the previous 10 years. It was a strong company that had come across some temporary headwinds and our analysis (Q1 2022 letter) confirmed that the risks are manageable. We bought the stock at $210 per share in Q1 and sold about a quarter of our position in the $400-450 range in Q3. EPAM remains a top 10 position and closed the year at $330 per share."


Photo by Danial Igdery on Unsplash

Our calculations show that EPAM Systems, Inc. (NYSE:EPAM) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. EPAM Systems, Inc. (NYSE:EPAM) was in 34 hedge fund portfolios at the end of the second quarter of 2022, compared to 36 funds in the previous quarter. EPAM Systems, Inc. (NYSE:EPAM) delivered a 4.11% return in the past 3 months.

In December 2022, we also shared another hedge fund’s views on EPAM Systems, Inc. (NYSE:EPAM) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q4 2022 page.


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Disclosure: None. This article is originally published at Insider Monkey.