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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 Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY). Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) is a leading operator of entertainment and dining venues for adults and families. The one-month return of Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) was -1.77%, and its shares lost 62.43% of their value over the last 52 weeks. On April 23, 2025, Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) stock closed at $19.48 per share with a market capitalization of $672.358 million.
Patient Capital Opportunity Equity Strategy stated the following regarding Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) in its Q1 2025 investor letter:
"Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) trended lower over the first quarter as the market continued to worry about revenue visibility. The company had a disappointing 2024, culminating in the abrupt departure of then-CEO Chris Morris. Founded in 1982 in Dallas, Texas, the company has expanded to over 200 venues in North America across two brands (Dave & Busters, and Main Event). The company is in the middle of a multi-year transformation focused on reinvigorating growth through store remodels, store expansions, and technology upgrades while enhancing margins through cost optimizations and synergies. Despite the efforts, the results haven’t yet materialized in the numbers as the challenging macro environment continues to weigh on consumer expenditures. In the meantime, an activist, Hill Path Capital, has built up a position in the company and taken two board seats. With the Chairman of the Board stepping in as CEO, we are already starting to see improved results with the focus on a back-to-basics strategy delivering better than expected results in March and April. While the timing of business model inflection remains uncertain, what’s clear is the stock is trading at an all-time low valuation of 6.8x forward earnings. As the company works to improve its operations, they’ve been actively returning cash to shareholders through buybacks, repurchasing 12% of shares outstanding over the last 12 months."