Why One Value Fund Just Bought $30 Million of a Diagnostics Stock Down 90% From Pandemic-Era Highs

On November 14, New York City-based Newtyn Management disclosed a purchase of 994,332 shares of QuidelOrtho Corporation (QDEL), increasing its stake by approximately $30.4 million.

What Happened

According to a filing with the Securities and Exchange Commission dated November 14, Newtyn Management reported buying 994,332 additional shares of QuidelOrtho Corporation (QDEL) during the third quarter. This raised its total position to 2.7 million shares with a reported value of $79.5 million as of September 30.

What Else to Know

The fund's QDEL stake now represents 9.7% of its $816.9 million in 13F reportable assets.

Top holdings after the filing:

• NASDAQ:INDV: $101.3 million (12.4% of AUM)
• NASDAQ:QDEL: $79.5 million (9.7% of AUM)
• NASDAQ:TBPH: $72.3 million (8.8% of AUM)
• NYSE:AD: $67.5 million (8.3% of AUM)
• NYSE:CNNE: $62.5 million (7.6% of AUM)

As of November 14, QDEL shares were priced at $27.76, down 26% over the past year and well underperforming the S&P 500, which is up 13% in the same period.

Company Overview

Company Snapshot

• QuidelOrtho Corporation develops and manufactures diagnostic testing technologies, including clinical chemistry instruments, immunoassay systems, blood typing and donor screening tools, and point-of-care and molecular diagnostic products.
• The company generates revenue through direct sales and distribution of diagnostic equipment and consumables to healthcare providers, laboratories, blood banks, and retail channels.
• It serves hospitals, clinical and reference laboratories, urgent care and retail clinics, blood banks, donor centers, and international markets in North America, EMEA, China, and beyond.

QuidelOrtho Corporation is a leading provider of diagnostic testing solutions, operating at scale with a global footprint and a diversified product portfolio. The company leverages expertise in laboratory, transfusion medicine, point-of-care, and molecular diagnostics to address a broad range of healthcare testing needs.

Its strategy centers on innovation in diagnostic technologies and expanding access to rapid and accurate testing for both professional and consumer markets. This diversified approach supports resilience and positions the company as a key player in the global diagnostics industry.

Foolish Take

Long-term investors will likely view Newtyn’s move as a high-conviction bet on a deeply discounted diagnostics play trying to reset its fundamentals after a turbulent few years. QuidelOrtho’s shares have shed nearly 90% of their value since 2020, but the company’s latest quarter showed signs of stabilization in its core business even as headline results were overshadowed by a $701 million goodwill impairment tied to its lower market valuation. Beneath that non-cash charge, non-respiratory revenue grew 5% as reported, lab revenue increased 5%, and adjusted EBITDA margin expanded to 25%, up 180 basis points from last year.

For a value-oriented fund like Newtyn—whose portfolio already skews toward complex special situations—doubling down on QDEL fits a pattern: leaning into distressed but cash-generating companies with pathways to operational improvement. With adjusted EPS of $0.80, rising cost efficiencies, and narrowed full-year guidance, the underlying trajectory may look more durable than the stock chart suggests. Ultimately, it'll be important to watch whether margin gains continue as COVID revenue declines stabilize, and whether the company can maintain growth in labs, immunohematology, and point-of-care as it winds down donor screening.

Glossary

13F: A quarterly report filed by institutional investment managers to disclose their equity holdings.
Assets Under Management (AUM): The total market value of investments managed by a fund or firm on behalf of clients.
Stake: The ownership interest or share held in a company by an investor or fund.
Holding: A security or asset owned by an investor or fund.
Filing: An official submission of required documents or reports to a regulatory authority, such as the SEC.
Point-of-Care: Medical testing performed at or near the site of patient care rather than in a centralized laboratory.
Molecular Diagnostics: Techniques that analyze biological markers in the genome and proteome to diagnose and monitor disease.
Consumables: Products that are used up during diagnostic testing, such as reagents or test cartridges.
Transfusion Medicine: The branch of medicine focused on the transfusion of blood and blood components.
EMEA: Geographic region including Europe, the Middle East, and Africa.
13F Reportable Assets: Securities that must be disclosed in a fund's 13F filing with the SEC.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends QuidelOrtho. The Motley Fool has a disclosure policy.