S&P/ASX 200 Index share CSL Ltd (ASX: CSL) is historically a long-term outperformer. But the stock has struggled in 2023.
Shares in the biotechnology company are currently trading for $266.80 apiece, down 5.3% since the opening bell of 3 January. That compares to a 3% gain posted by the ASX 200.
Here's why the ASX 200 share has come under pressure. And why this fund manager is "very happy" to own the biotech company.
What's happening with the ASX 200 share?
As you can see in the chart above, the CSL share price really hit some turbulence on 14 June.
That came after the ASX 200 share announced a downgrade of its FY 2023 profit guidance. This was driven by higher than initially forecast foreign currency headwinds.
At the time, CSL revised its forecast for its full-year net profits after tax and amortisation (NPATA) to the range of US$2.9 billion to US$3 billion in constant currency.
That revision saw the ASX 200 share close the day down 6.9%.
CSL reported its audited results on 15 August. And NPATA came in right near the bottom end of that forecast, at US$2.86 billion.
Other highlights of the FY 2023 results included a 31% increase in revenue in constant currency to US$13.31 billion. And the full-year dividend increased 6% to US$2.36 per share.
Management also reaffirmed its FY 2024 guidance. They expect NPATA of in the range of US$2.9 billion to US$3 billion in constant currency. And FY 2024 revenue growth of 9% to 11%.
Which brings us to Patrick Hodgens, managing director Firetrail Investments.
CSL counts amongst the biggest holdings at Firetrail Investments' high conviction fund.
And Hodgens wasn't put off by the ASX 200 share's results.
According to The Australian Financial Review, Firetrail believes this is a case of CEO Paul McKenzie "looking to reset".
According to Hodgens:
We're very happy to be owning CSL over the medium term and, in fact, we bought quite a bit more on the back of that perceived weakness by the market. We think CSL has some really good earnings upside if you look out two to three years.
CSL share price snapshot
As mentioned above, the CSL share price has underperformed in 2023 and over the past 12 months.
The ASX 200 share has outperformed longer-term, up 27% in five years.