Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. 2025 got out to a solid start with the market hitting all-time highs in mid-February. However, a dramatic reversal pushed the S&P 500 down 8.7%, closing the quarter down 4.3%. During the quarter, the strategy returned -9.5% net of fees compared to the S&P 500’s -4.3% return. According to a three-factor performance attribution model, allocation and interaction effects contributed positively to the portfolio’s performance, which were partially offset by selection effects. In addition, you can check the fund’s top 5 holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Patient Capital Opportunity Equity Strategy highlighted stocks such as Carvana Co. (NYSE:CVNA). Headquartered in Tempe, Arizona, Carvana Co. (NYSE:CVNA) is an e-commerce platform for buying and selling used cars. The one-month return of Carvana Co. (NYSE:CVNA) was 8.33%, and its shares gained 185.08% of their value over the last 52 weeks. On April 23, 2025, Carvana Co. (NYSE:CVNA) stock closed at $220.94 per share with a market capitalization of $25.838 billion.

Patient Capital Opportunity Equity Strategy stated the following regarding Carvana Co. (NYSE:CVNA) in its Q1 2025 investor letter:

“This quarter we entered five new positions, while exiting three. We began building a position in Carvana Co. (NYSE:CVNA) in the quarter. Carvana is the world’s largest online-only used car retailer. The company has spent the last decade plus building a vertically integrated platform that has captured 1% of a massive $1T total addressable market (TAM). Even with a focus on growth, the company has achieved industry leading EBITDA margins by leveraging their fixed cost base as they scale. Despite innovation in other industries, the used car market is still antiquated. Supply is fragmented, pricing lacks transparency, and the customer experience is generally poor. Carvana addresses these pain points through no-negotiation pricing and rapid delivery, eliminating geographical constraints for consumers. As the company continues enhancing the customer experience, we believe they are set to continue to win market share. Given the enormous TAM, even small incremental share gains can make a big difference. Following their financing issues in 2022-2023, the company has emerged with greater cost discipline and margin improvement. We believe this strengthened operational approach will continue serving them well, supporting both top and bottom-line growth going forward.”