Alluvial Capital Management, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. A return of 8.5% was delivered by the fund for the third quarter of 2021, as small-cap and micro-cap stock indexes struggled. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Alluvial Capital Management, in its Q3 2021 investor letter, mentioned Crawford United Corporation (NYSE: CRAWA) and discussed its stance on the firm. Crawford United Corporation is a Cleveland, Ohio-based investment holding company with a $110.6 million market capitalization. CRAWA delivered a 13.83% return since the beginning of the year, while its 12-month returns are up by 24.69%. The stock closed at $32.46 per share on November 12, 2010.
Here is what Alluvial Capital Management has to say about Crawford United Corporation in its Q3 2021 investor letter:
“In other disappointing IPO-related news, I was elated see our acquisitive Cleveland industrial holding company, Crawford United, file for an IPO in August only to withdraw the filing earlier this month. Crawford intended to use the IPO proceeds to strengthen its balance sheet and fund additional acquisitions. The company did not comment on the development. I suspect Crawford may be feeling the effects of the tight labor market and higher raw materials costs, which will put pressure on short-term results. Whatever the company’s short-term results may be, its long-term value will be driven by its ability to identify and acquire attractive manufacturing assets. Costrelated stresses on small manufacturers could actually prove a boon for Crawford if it enables them to acquire assets at lower valuations.”
Based on our calculations, Crawford United Corporation (NYSE: CRAWA) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. Crawford United Corporation (NYSE: CRAWA) delivered a -7.30% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.
