Summers Value Partners, an investment management firm, published its “Summers Value Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly return of 13.6% net of fees, was recorded by the fund for the second quarter of 2021, outpacing the Russell 2000 Index return of 4.1% and the Russell Micro-Cap Index return of 3.8%. 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 Summers Value Partners, the fund mentioned Inotiv, Inc. (NASDAQ: NOTV), and discussed its stance on the firm. Inotiv, Inc. is a West Lafayette, Indiana-based contract research organization, that currently has a $413.4 million market capitalization. NOTV delivered a 112.36% return since the beginning of the year, extending its 12-month returns to 386.41%. The stock closed at $26.12 per share on July 30, 2021.
Here is what Summers Value Partners has to say about Inotiv, Inc. in its Q2 2021 investor letter:
“The biggest contributor in the second quarter was Inotiv (NOTV), which appreciated by 33% and was added to the Russell 2000 Index in June. The company announced two acquisitions in the quarter along with very strong first quarter results. We are encouraged by the progress the company has made in a short period of time.”
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Based on our calculations, Inotiv, Inc. (NASDAQ: NOTV) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. NOTV was in 9 hedge fund portfolios at the end of the first quarter of 2021, compared to 3 funds in the fourth quarter of 2020. Inotiv, Inc. (NASDAQ: NOTV) delivered a 10.58% 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.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage.
Disclosure: None. This article is originally published at Insider Monkey.
