ClearBridge Investments, an investment management firm, published its “Aggressive Growth Strategy” first quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Aggressive Growth Strategy outperformed its Russell 3000 Growth Index benchmark in the first quarter. On an absolute basis, the Strategy generated gains across seven of the eight sectors in which it was invested (out of 11 sectors total). You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned AMC Networks Inc. (NASDAQ: AMCX), and shared their insights on the company. AMC Networks Inc. is a New York-based media company that currently has a $2.7 billion market capitalization. Since the beginning of the year, AMCX delivered an 81.94% return, extending its 12-month gains to 166.72%. As of June 23, 2021, the stock closed at $64.31 per share.
Here is what ClearBridge Investments has to say about AMC Networks Inc. in its Q1 2021 investor letter:
“Media has been another bright spot for the Strategy, boosted by the return of live events and subsequent rebound in advertising as well as good initial traction for several of our companies new streaming services. AMC Networks has seen strong initial subscriber growth to their over-the-top services.”
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Our calculations show that AMC Networks Inc. (NASDAQ: AMCX) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, AMC Networks Inc. was in 22 hedge fund portfolios, compared to 21 funds in the fourth quarter of 2020. AMCX delivered a 6.28% 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.
