Carillon Tower Advisers, an investment management firm, published its “Carillon Eagle Small Cap Growth Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. Small-cap stocks extended their recent run of success in the second quarter, advancing for the fifth consecutive quarter following the selloff in the early stages of the pandemic. Among the two style indexes, the Russell 2000® Growth Index (up 3.92%) lagged its Russell 2000® Value Index (up 4.56%) counterpart once again in the period, in what has become a common theme as of late. Individual sector returns across the Russell 2000 Growth were nearly all positive, with energy (up 24.93%) leading the way, despite its relatively modest weighting in the benchmark 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 Carillon Tower Advisers, the fund mentioned Cricut, Inc. (NASDAQ: CRCT) and discussed its stance on the firm. Cricut, Inc. is a South Jordan, Utah-based home and office supplies products manufacturer with a $6.9 billion market capitalization. CRCT delivered a 13.38% return in the past month and closed at $31.33 per share on September 16, 2021.
Here is what Carillon Tower Advisers has to say about Cricut, Inc. in its Q2 2021 investor letter:
“Cricut designs and markets a creativity platform that enables users to turn ideas into professional-looking handmade goods by using the firm’s assortment of connected machines, design apps, and accessories and materials. The firm’s first quarterly results as a public company came in handily above Wall Street expectations. More importantly, the company’s outlook for the current quarter caused a meaningful lift in current year revenue and earnings estimates. Cricut appears to be continuing its strong business momentum even as it faces comparisons against outsized growth rates experienced as its business surged during the pandemic.”
Photo by Rachael Gorjestani on Unsplash
Based on our calculations, Cricut, Inc. (NASDAQ: CRCT) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. CRCT was in 13 hedge fund portfolios at the end of the first half of 2021, compared to 12 funds in the previous quarter. Cricut, Inc. (NASDAQ: CRCT) delivered a -14.96% 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.
