McIntyre Partnerships Q1 2026 Letter: Heavy Losses Driven by QuidelOrtho Bet
McIntyre Partnerships reported a significant decline in its first quarter of 2026, with gross returns falling approximately 19.5% and net returns dropping 19.8%, significantly underperforming the Russell 2000 Value Index which rose 5%. The primary driver of this downturn was a sharp pullback in life science tools and medical device stocks, particularly affecting the fund’s largest holding, QuidelOrtho Corporation (QDEL). Despite the losses, the firm has increased its position in QuidelOrtho to over 20% of capital, viewing the current valuation as a rare long-term opportunity. To mitigate risk, put options have been purchased to cap total potential loss at under 20%. The manager draws parallels to previous concentrated bets on CC and GTX, which initially faced drawdowns but ultimately generated substantial gains. While QDEL struggled, other holdings like CC and SEG contributed positively due to data center cooling demand and successful asset sales, respectively. The firm maintains confidence in QuidelOrtho’s ability to generate approximately $4 in free cash flow per share by 2028, emphasizing a focus on long-term business fundamentals over near-term market volatility.
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McIntyre Partnerships Q1 2026 Letter: Heavy Losses Driven by QuidelOrtho Bet
McIntyre Partnerships reported a significant decline in its first quarter of 2026, with gross returns falling approximately 19.5% and net returns dropping 19.8%, significantly underperforming the Russell 2000 Value Index which rose 5%. The primary driver of this downturn was a sharp pullback in life science tools and medical device stocks, particularly affecting the fund’s largest holding, QuidelOrtho Corporation (QDEL). Despite the losses, the firm has increased its position in QuidelOrtho to over 20% of capital, viewing the current valuation as a rare long-term opportunity. To mitigate risk, put options have been purchased to cap total potential loss at under 20%. The manager draws parallels to previous concentrated bets on CC and GTX, which initially faced drawdowns but ultimately generated substantial gains. While QDEL struggled, other holdings like CC and SEG contributed positively due to data center cooling demand and successful asset sales, respectively. The firm maintains confidence in QuidelOrtho’s ability to generate approximately $4 in free cash flow per share by 2028, emphasizing a focus on long-term business fundamentals over near-term market volatility.
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