Seeking Alphaยท2025-10-16 20:58Fund Performance - The Patient Opportunity Equity Strategy achieved a total return of 14.1% net of fees in Q3 2025, outperforming the S&P 500 Index which returned 8.1% [2] - The portfolio's outperformance was driven by selection and interaction effects, while allocation effects partially offset these gains [3] Portfolio Composition - The strategy was overweight in sectors such as Consumer Discretionary, Communication Services, Financials, Energy, Industrials, and Health Care, while underweight in Real Estate, Utilities, Materials, Consumer Staples, and Information Technology [4] - The portfolio ended the quarter with 36 holdings, with the top 10 stocks representing 51.1% of total assets, indicating a high active share of approximately 92.5% [5] Market Context - The market's upward trend in Q3 was supported by resilient consumer spending, Federal Reserve rate cuts, and ongoing AI investments [6] - Long-held positions in the portfolio broke through multi-year resistance levels, contributing to overall performance [6] Key Contributors - Precigen (PGEN) was the top contributor, benefiting from the FDA approval of Papzimeos, which is expected to launch soon [10][15] - Alphabet Inc. (GOOGL) and Alibaba Group Holdings (BABA) also significantly contributed to performance, with GOOGL gaining regulatory clarity and BABA announcing aggressive AI investment plans [8][16][17] Key Detractors - Dave & Buster's Entertainment (PLAY) was the largest detractor due to disappointing results and leadership changes, although there is optimism for future recovery under new management [18] - QXO Inc. (QXO) faced concerns over weakening construction activity but continues to execute its acquisition strategy [19] - Crocs Inc. (CROX) declined following disappointing guidance and challenges with its HEYDUDE brand [20][21] Strategic Actions - The portfolio eliminated five positions during the quarter, reallocating capital towards higher conviction names [12] - The strategy continues to capitalize on market volatility, increasing positions in Delta Air Lines (DAL) and Norwegian Cruise Line Holdings (NCLH) during market pullbacks [9]