Alger, an investment management firm, published its “Alger Small Cap Focus Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. During the quarter, the largest portfolio sector weightings were Health Care and Information Technology. The largest sector overweight was Health Care. Class A shares of the Alger Small Cap Focus Fund outperformed the Russell 2000 Growth Index during the second quarter of 2021. 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 Alger Small Cap Focus Fund, the fund mentioned Viant Technology Inc. (NASDAQ: DSP), and discussed its stance on the firm. Viant Technology Inc. is an Irvine, California-based software company, that currently has a $983.6 million market capitalization. GH delivered a -30.37% return for the past 3 months, and it closed at $17.18 per share on August 11, 2021.
Here is what Alger Small Cap Focus Fund has to say about Viant Technology Inc. in its Q2 2021 investor letter:
“Viant Technology, Inc. was among the top detractors from performance. Viant provides software that enables advertising buying with its programmatic solutions. Viant’s main product is its demand side platform, Adelphic, which is an enterprise software platform used by marketers and ad agencies to centralize the planning, buying and measurement of their advertising across most channels. Viant’s customers can buy ads across platforms including desktop, mobile, connected TV, linear TV, streaming audio and digital billboards. The stock underperformed during the quarter due primarily to announcements by big tech to remove third party cookies and the Identifier for advertisers, which is a random device identifier assigned to users’ devices. Unlike other DSP providers, Viant utilizes a “people-based identification” solution that relies on identity-based data as opposed to cookies or anonymous device identifiers. This gives consumers more visibility and control over their data, inclusive of an opt-out capability. Given the ongoing challenges to individual-level tracking and the rise of connected TV, this people-based approach should continue to gain traction with marketers.”
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Based on our calculations, Viant Technology Inc. (NASDAQ: DSP) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. DSP was in 14 hedge fund portfolios at the end of the first quarter of 2021. Viant Technology Inc. (NASDAQ: DSP) delivered a -9.50% return in the past month.
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.
