Sotera Health Company (SHC) Stock Slipped Following a Lawsuit

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” first quarter 2024 investor letter. A copy of the same can be downloaded here. Early gains in large caps and tech leaders expanded to include other sectors and smaller companies, especially later in the quarter. Large companies outperformed small ones, gaining 10.3% and 5.2%, respectively. In the first quarter, the fund returned 2.25% (net) lagging behind the benchmark, the Russell 2500 Growth Index’s 8.51% return. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Meridian Growth Fund highlighted stocks like Sotera Health Company (NASDAQ:SHC), in the first quarter 2024 investor letter. Sotera Health Company (NASDAQ:SHC) offers sterilization, lab testing, and advisory services. The one-month return of Sotera Health Company (NASDAQ:SHC) was 9.05%, and its shares lost 36.51% of their value over the last 52 weeks. On June 25, 2024, Sotera Health Company (NASDAQ:SHC) stock closed at $11.93 per share with a market capitalization of $3.377 billion.

Meridian Growth Fund stated the following regarding Sotera Health Company (NASDAQ:SHC) in its first quarter 2024 investor letter:

"Sotera Health Company (NASDAQ:SHC) offers mission-critical sterilization and lab-testing services to the healthcare industry and counts 40 of the top 50 medical device companies and eight of the top 10 pharmaceutical companies as customers. As part of its sterilization service portfolio, the company offers ethylene oxide sterilization as a critical modality. In fact, approximately 50% of all medical devices are sterilized with ethylene oxide, and in most cases, it is required by the FDA for effective sterilization and market commercialization. The stock came under pressure during the quarter following a new lawsuit related to its Sterigenics facility located in California which conducts ethylene oxide sterilization. The company had settled a previous lawsuit in Illinois and we believe the company can defend its position and the merits of its Caroline operations in this case as well. Sterigenics has a strong track record of performance, emissions control, and compliance with regulatory standards. Given the company’s strong competitive position, attractive margins, and consistent growth profile, we added to our position in the company during the quarter."

A worker in a cleanroom laboratory environment, performing gamma and electron beam irradiation for medical devices.

Sotera Health Company (NASDAQ:SHC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Sotera Health Company (NASDAQ:SHC) at the end of the first quarter which was 23 in the previous quarter. During the first quarter, Sotera Health Company (NASDAQ:SHC) reported a 12.5% increase in revenues and a 13.7% increase in adjusted EBITDA compared to Q1 2023. While we acknowledge the potential of Sotera Health Company (NASDAQ:SHC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed Sotera Health Company (NASDAQ:SHC) in another article and shared the list of stocks insiders are selling. In addition, please check out our hedge fund investor letters Q1 2024 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.