Evermore Global Advisors, an investment management firm, published its “Evermore Global Value Fund” second-quarter 2021 investor letter – a copy of which can be downloaded here. Institutional Class shares of the Evermore Global Value Fund (“EVGIX” or the “Fund”) were down 0.14% for the quarter ended June 30, 2021. The Fund ended the quarter with $264.8 million in net assets and 37 issuer positions. As of quarter-end, 68.4% of the Fund’s net assets were in micro-and small-capitalization (up to $2 billion) companies; 11.7% were in mid-capitalization (between $2 billion and $10 billion) companies, and 16.6% were in large-capitalization (> $10 billion) companies You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Evermore Global Advisors, the fund mentioned Rekor Systems, Inc. (NASDAQ: REKR) and discussed its stance on the firm. Rekor Systems, Inc. is a Maryland, United States-based software company with a $533 million market capitalization. REKR delivered a 51.61% return since the beginning of the year, while its 12-month returns are up by 112.78%. The stock closed at $10.67 per share on September 24, 2021.
Here is what Evermore Global Advisors has to say about Rekor Systems, Inc. in its Q2 2021 investor letter:
“Rekor Systems Inc. (REKR US). In February 2021,the Fund participated in a primary offering of shares in Rekor, a US-based technology company focused on vehicle identification systems sold to government entities. Shares proceeded to nearly double in short order, and we sold the position in mid-April for a sizable gain. When markets hand you a gift, sometimes it’s best to ring the cash register.”
Based on our calculations, Rekor Systems, Inc. (NASDAQ: REKR) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. REKR was in 13 hedge fund portfolios at the end of the first half of 2021. Rekor Systems, Inc. (NASDAQ: REKR) delivered an 8.47% 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.