Argosy Investors, an investment management firm, published its second quarter 2021 investor letter – a copy of which can be downloaded here. A portfolio return of 16.5% was recorded by the fund for the second half of 2021, while the S&P 500 by comparison returned 15.3%. You can view the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Argosy Investors, the fund mentioned Endava plc (NYSE: DAVA), and discussed its stance on the firm. Endava plc is a London, United Kingdom-based software company, that currently has a $7.6 billion market capitalization. DAVA delivered a 64.66% return since the beginning of the year, extending its 12-month returns to 138.81%. The stock closed at $126.38 per share on August 02, 2021.
Here is what Argosy Investors has to say about Endava plc in its Q2 2021 investor letter:
“DAVA has been a huge winner for us, up 279% from Feb. 2019 purchase to sale. I struggle to sell these, but my valuation discipline makes it hard not to. Endava’s business, for example, has not grown279% in 2 years, not even close, so it is now valued at a high multiple, and we may continue to sell if the valuation continues to climb.”
Based on our calculations, Endava plc (NYSE: DAVA) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. DAVA was in 9 hedge fund portfolios at the end of the first quarter of 2021, compared to 10 funds in the fourth quarter of 2020. Endava plc (NYSE: DAVA) delivered a 40.94% 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.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage.
Disclosure: None. This article is originally published at Insider Monkey.
