On December 31, 2023, PRIMECAP Management (Trades, Portfolio) executed a notable transaction by increasing its investment in Xencor Inc (XNCR, Financial), a clinical-stage biopharmaceutical company. The firm added 717,401 shares to its position, resulting in a total holding of 8,901,607 shares. This trade action had a 0.01% impact on PRIMECAP's portfolio, with the shares purchased at an average price of $21.23. Following the transaction, Xencor Inc now represents 0.16% of PRIMECAP Management (Trades, Portfolio)'s portfolio, with the firm holding a significant 14.62% stake in the biotech company.
Insight into PRIMECAP Management (Trades, Portfolio)
Founded in 1983, PRIMECAP Management (Trades, Portfolio) Company is an independent investment management firm based in Pasadena, CA. The firm is known for its disciplined approach to value investing, focusing on long-term equity investment results. PRIMECAP Management (Trades, Portfolio)'s investment philosophy is centered on recognizing undervalued stocks early and maintaining a patient approach until the market aligns with their valuation. The firm's multi-counselor investment model allows for individual autonomy among portfolio managers, each managing a distinct segment of the portfolio. 
About Xencor Inc
Xencor Inc, headquartered in the USA, is at the forefront of developing engineered monoclonal antibody therapeutics for severe and life-threatening diseases. Since its IPO on December 3, 2013, the company has been leveraging its proprietary XmAb technology platform to advance a diverse portfolio of drug candidates. Xencor's business segments include milestone achievements, research collaborations, and royalties from its drug development efforts. 
Financial and Market Position of Xencor Inc
As of the date of this article, Xencor Inc has a market capitalization of $1.19 billion, with a current stock price of $19.50. The stock is considered "Modestly Undervalued" with a GF Value of $27.59 and a price to GF Value ratio of 0.71. Despite the company not posting profits, as indicated by a PE percentage of 0.00, the stock has experienced a significant increase of 227.73% since its IPO. However, the year-to-date performance shows a decline of 13.37%.
PRIMECAP Management (Trades, Portfolio)'s Strategic Investment
Xencor Inc plays a strategic role in PRIMECAP Management (Trades, Portfolio)'s portfolio, complementing its top holdings in the technology and healthcare sectors, which include giants like Amgen Inc (AMGN, Financial), Biogen Inc (BIIB, Financial), and Eli Lilly and Co (LLY, Financial). The firm's equity stands at $125.95 billion, with technology and healthcare being the predominant sectors.
Performance Metrics of Xencor Inc
Xencor Inc's GF Score is 69/100, indicating a potential for average performance. The score components include a Financial Strength rank of 8/10 and a Profitability Rank of 4/10. The company's Growth Rank and GF Value Rank are 5/10 and 9/10, respectively, while the Momentum Rank is low at 2/10.
Assessing Xencor Inc's Financial Health and Prospects
Xencor Inc's financial health is robust, with a cash to debt ratio of 8.14, placing it in the 742nd rank within its industry. However, the company's ROE and ROA are negative at -17.09% and -14.73%, respectively. The company's growth prospects are modest, with a revenue growth over the past three years at 1.00%, and no significant growth in EBITDA or earnings during the same period.
Conclusion: The Impact of PRIMECAP's Investment
PRIMECAP Management (Trades, Portfolio)'s recent addition to its stake in Xencor Inc underscores the firm's confidence in the biotech company's future. This move aligns with PRIMECAP's investment philosophy of identifying undervalued opportunities and holding them for the long term. For value investors, this transaction highlights a potential opportunity in a company that is positioned for growth, despite current market undervaluation and recent stock performance challenges.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
