Mercury Systems (MRCY) Fell on Longer-than-Expected Turn-Around News
Fred Alger Management, an investment management company, released its “Alger Small Cap Focus Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, the fund underperformed the Russell 2000 Growth Index. The Consumer Discretionary and Energy sectors contributed to the fund’s relative performance in the quarter, while Information Technology and Industrials detracted from performance. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Alger Small Cap Focus Fund highlighted stocks like Mercury Systems, Inc. (NASDAQ:MRCY) in the second quarter 2023 investor letter. Headquartered in Andover, Massachusetts, Mercury Systems, Inc. (NASDAQ:MRCY) is a technology company that serves defense and aerospace industries. On September 5, 2023, Mercury Systems, Inc. (NASDAQ:MRCY) stock closed at $35.90 per share. One-month return of Mercury Systems, Inc. (NASDAQ:MRCY) was -5.97%, and its shares lost 22.65% of their value over the last 52 weeks. Mercury Systems, Inc. (NASDAQ:MRCY) has a market capitalization of $2.089 billion.
Alger Small Cap Focus Fund made the following comment about Mercury Systems, Inc. (NASDAQ:MRCY) in its Q2 2023 investor letter:
“Mercury Systems, Inc. (NASDAQ:MRCY) is a defense electronics company that supplies secure sensors and safety-critical processing subsystems for use on military platforms. The company's products cater to two main application areas: C41 (Command, Control, Communications, Computers & Intelligence) and SEMS (Sensor & Effector Mission Systems). Within these two areas, Mercury's products support Platform & Mission Management, Electronic Warfare, Radar. Infrared, Acoustics, and Weapon Systems. The company provides content on over 300 active programs with over 25 prime defense contractors, where Mercury's solutions are commercial off-the-shelf (COTS) via an open architecture which allow it to benefit from the secular trend of defense electronics outsourcing. During the period, the company reported fiscal third quarter results, where revenues and earnings exceeded analyst estimates. However, shares detracted from performance as the company concluded the review of strategic alternatives in late June without a sale of the company, despite previous media reports suggesting interest from multiple private equity firms. In conjunction, the board also announced the resignation of CEO Mark Aslett and the appointment of board member Bill Ballhaus as interim President & CEO. Despite strong secular drivers and an incumbent position on defense programs, shares fell on the potential of longer than expected turnaround story with low visibility into near-term revenues and earnings.”
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Mercury Systems, Inc. (NASDAQ:MRCY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Mercury Systems, Inc. (NASDAQ:MRCY) at the end of second quarter which was 20 in the previous quarter.
We discussed Mercury Systems, Inc. (NASDAQ:MRCY) in another article and shared Baron Small Cap Fund's views on the company. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
