Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, published its “Longleaf Partners Global Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A portfolio quarterly return of 1.27% was recorded by the fund for the second quarter of 2021, taking year-to-date (YTD) returns to 14.63% while its benchmark, the MSCI World Index, by comparison returned 7.74% and 13.05% over the same periods. 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 Longleaf Partners Global Fund, the fund mentioned The Williams Companies, Inc. (NYSE: WMB), and discussed its stance on the firm. The Williams Companies, Inc. is a Tulsa, Oklahoma-based energy company, that currently has a $30.4 billion market capitalization. WMB delivered a 24.99% return since the beginning of the year, extending its 12-month returns to 20.19%. The stock closed at $25.06 per share on August 06, 2021.
Here is what Longleaf Partners Global Fund has to say about The Williams Companies, Inc. in its Q2 2021 investor letter:
“Williams (14%, 0.50%), the natural gas pipeline operator, was also a positive contributor. The value grew slowly but steadily thanks to continued cash flow growth at Williams’s main Transco pipeline, as well as good volume trends (up 11% YOY) in its Northeast assets. The stock traded up with gas price strength as the quarter went on. We believe that management is open to more transactions to grow and simplify value per share, and as industry conditions improve, this becomes more likely.”
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Based on our calculations, The Williams Companies, Inc. (NYSE: WMB) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. WMB was in 34 hedge fund portfolios at the end of the first quarter of 2021, compared to 38 funds in the fourth quarter of 2020. The Williams Companies, Inc. (NYSE: WMB) delivered a -0.95% 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.
