Carillon Tower Advisers, an investment management firm, published its “Carillon Eagle Small Cap Growth Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. Small-cap stocks experienced a bit of a disappointing quarter as both growth and value indexes saw negative quarterly returns for the first time since the pandemic-led market selloff in the early part of 2020. In a continuation of the recent trend, the Russell 2000® Growth Index (down 5.65%) trailed its Russell 2000® Value Index (down 2.98%) counterpart once again, with this quarter now marking four consecutive quarters of underperformance for growth. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Carillon Tower Advisers, in its Q3 2021 investor letter, mentioned Chart Industries, Inc. (NASDAQ: GTLS) and discussed its stance on the firm. Chart Industries, Inc. is a Ball Ground, Georgia-based manufacturing company with a $7.1 billion market capitalization. GTLS delivered a 66.31% return since the beginning of the year, while its 12-month returns are up by 115.35%. The stock closed at $195.90 per share on November 8, 2021.
Here is what Carillon Tower Advisers has to say about Chart Industries, Inc. in its Q3 2021 investor letter:
“Chart Industries manufactures highly engineered equipment servicing multiple applications in the energy and industrial gas markets. The stock proved to be an impressive contributor once again in the quarter, as the company remains uniquely positioned to benefit from the ongoing energy transition. Most notably, their exposure to the potential adoption of hydrogen as a clean energy source has certainly resonated with investors. The firm also continues to be particularly optimistic on their future growth opportunities within a number of additional environmental, social, and governancerelated (ESG) secular trends such as carbon capture and water treatment.”
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Based on our calculations, Chart Industries, Inc. (NASDAQ: GTLS) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. GTLS was in 27 hedge fund portfolios at the end of the first half of 2021, compared to 19 funds in the previous quarter. Chart Industries, Inc. (NASDAQ: GTLS) delivered a 17.04% 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.
