Alger, an investment management firm, published its “Alger Weatherbie Specialized Growth Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. During the quarter, the largest portfolio sector weightings were Financials and Health Care. The largest sector overweight was Financials. Class A shares of the Alger Weatherbie Specialized Growth Fund outperformed the Russell 2500 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 Weatherbie Specialized Growth Fund, the fund mentioned Core Laboratories N.V. (NYSE: CLB), and discussed its stance on the firm. Core Laboratories N.V. is an Amsterdam, Netherlands-based petroleum industry company, that currently has a $1.3 billion market capitalization. CLB delivered a 9.24% return since the beginning of the year, extending its 12-month returns to 20.47%. The stock closed at $29.49 per share on August 11, 2021.
Here is what Alger Weatherbie Specialized Growth Fund has to say about Core Laboratories N.V. in its Q2 2021 investor letter:
“Core Laboratories NV was among the top contributors to performance. Core Laboratories N.V. is a unique oil services company that provides reservoir description and production enhancement services and products to the oil and gas industry. These services and products enable Core Laboratories’ clients to improve performance and increase resource recovery from producing fields. After a challenging 2020 for most oil service companies, including Core Laboratories, overall activity has stabilized and we believe Core Laboratories is currently poised to rebound. The company reported decent first quarter results, with adjusted earnings per share of $0.15, which exceeded Wall Street expectations. More importantly, management provided a positive outlook, which we believe has been reinforced by improving oil prices and overall economic activity.”
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Based on our calculations, Core Laboratories N.V. (NYSE: CLB) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. CLB was in 17 hedge fund portfolios at the end of the first quarter of 2021, compared to 12 funds in the fourth quarter of 2020. Core Laboratories N.V. (NYSE: CLB) delivered a -12.66% 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.
